Knowledge and Insights
The Coronavirus Aid, Relief and Economic Security (CARES) Act established the Coronavirus Relief Fund (the Fund) and appropriated $150 billion to the Fund. The purpose of the Fund is to make payments for specified uses to state and certain local governments. State governments that receive funding have flexibility when determining how to use the funds. Recently, in Pennsylvania, Governor Wolf signed Act 24 of 2020, which allocates this funding to cover necessary COVID-19 related costs for identified persons and entities incurred between March 1, 2020 and November 30, 2020. The Act includes $457,000,000 of COVID-19 relief funds for various providers within the Commonwealth of Pennsylvania. To qualify, the individual or provider must be in operation as of March 31, 2020. A portion of this funding will be available for providers of the following HCBS services:
- Adult Day Care Services (ADS) Providers
- Total available funds for these providers is $13,000,000.
- Home Health Care Provider or Home Care Agency
- Total available funds for these providers is $112,000,000.
- Residential Habilitation Services Provider
- Total available funds for these providers is $1,000,000.
The Act requires these funds to be spent on eligible expenses (examples noted below) by November 30, 2020 or returned to the Commonwealth. Providers must keep documentation to support that these funds were used for their response to the COVID-19 pandemic in case of an audit.
Eligible providers will automatically receive a one-time lump sum payment. The expectation is that the payments will begin to be distributed in July 2020. Providers do not need to submit requests for the one-time payments to be made.
How must the funds be spent?
Types of Eligible Expenses:
- COVID-19 related medical expenses (e.g. costs of providing COVID-19 testing);
- COVID-19 related public health expenses (e.g. acquisition and distribution of medical and protective supplies);
- COVID-19 related payroll expenses;
- Expenses of actions to facilitate compliance with COVID-19-related public health measures;
- Expenses associated with the provision of economic support in connection with the COVID-19 public health emergency; and
- Any other COVID-19-related expenses reasonably necessary.
Types of Ineligible Expenses:
- Expenses for the State share of Medicaid;
- Damages covered by insurance;
- Payroll or benefits expenses for employees whose work duties are not substantially dedicated to mitigating or responding to the COVID-19 public health emergency;
- Expenses that have been or will be reimbursed under any federal program, such as the reimbursement by the federal government pursuant to the CARES Act of contributions by States to State unemployment funds;
- Reimbursement to donors for donated items or services;
- Workforce bonuses other than hazard pay or overtime;
- Severance pay; and
- Legal settlements.
Mercadien’s COVID-19 Task Force will work with you to help you understand the compliance elements within the Act, compile the necessary documentation to track spending of amounts received and answer your questions. We’re also available to assist you with other relief options during these difficult times. Complete the COVID-19 Assistance Request form on our website or contact Frank Pina, CPA, Managing Director, at firstname.lastname@example.org or 609-689-2319 to get started.
DISCLAIMER: This advisory resource is for general information purposes only. It does not constitute business or tax advice, and may not be used and relied upon as a substitute for business or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified accountant, tax practitioner or attorney licensed to practice in the jurisdiction where that advice is sought.