The employers guide to Health Insurance for a furloughed workforce: CARES, PPP, Medicaid, and more

In over 100 years we have not had to declare an illness such as this a pandemic. These are unprecedented times that we all face. With more than 24 million small businesses across the US, not only economically, but socially, this has hit our communities hard. Currently, employers are balancing supply shortages, work challenges, work bans due to being classed as unessential, limited to social distancing requirements, or are facing a shortage of demand for their products or services. These economic challenges have forced many of our business clients to make some tough decisions, but there are options available. The challenge right now is that employees are out of work for lack of work, but this pandemic is exactly when they need health insurance coverage the most.

Economic funding

For the larger issue of working capital, as well as payroll and healthcare expenses. The CARES act has opened several doors. Within three days you can ask for a $10,000 loan advance from SBA. You can also apply for overall loan balance of up to $2 million available. https://www.sba.gov/page/disaster-loan-applications#section-header-0

In addition, PA has set aside $60 million in disaster assistance through the CWCA. Lancaster Counties direct point of contact is here: https://edclancaster.com/covid-19/ The question we are getting often at this point is if we get these loans to cover passive expenses, but still rely on unemployment for our employees compensation can we keep paying the group health insurance rates? The simple answer is yes. Insurers are extending an olive branch to allow you to continue to provide insurance to these workers through these trying times.

Coverage continuation

If your business can work remotely you may still be sustainable. You may also have a reserve to keep your workforce home and continue to pay overhead. But, if you are trying to figure out where to get the income for payroll, look at the Payroll Protection Program. In the CARES Act signed last week $350 billion dollars were earmarked for the Payroll Protection Program. Under the guidelines any business with fewer than 500 employees may apply and be awarded a loan up to 2.5x your monthly payroll. Best yet, the loan will be forgiven in the event you use all proceeds for qualified expenses including paying salaries, hourly employees, independent contractors, and health insurance premiums and retain those employees for 8 weeks after the loan is awarded. If you decide to use the resources for other expenses like inventory or materials, you are welcome to do so but those expenses will not be refunded.   Deadline to apply is: June 30, 2020

 https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp

Alternative planning

In the event that the only option is to truly lay off or furlough employees and wait out the storm, there is still hope. To many individuals being laid off they do have access to a special enrollment period to give them access to Medicaid and Marketplace coverage. It’s important that they know the IRS considers their annual income when it pertains to tax credits and marketplace coverage, and the Department of Human Services, CMS, and Medicaid consider more short term events to determine Medicaid eligibility.

If you feel your team needs help, but aren’t sure where to go, we are happy to assist in this matter. As a Community Based Organization, PA Health Advocates is committed to helping your workforce through these times. We are waiving our standard PEPM model and instead, we are reducing our cost structure to a one time $150 per employee fee to help your team figure out which avenue is best suited for their needs and work directly on their behalf to submit the necessary documents to the County Assistance Offices for Medicaid enrollment. Feel free to reach out to [email protected] to start a conversation.

About The Author

Joshua Brooker, is the Principal of PA Health Advocates. PAHA has been assisting individuals with health insurance since 2011 and focuses on markets under 500 employees for group, individual, Medicare, Medicaid, and CHIP support.