COVID-19 and the PPP

PAYCHECK PROTECTION PROGRAM (PPP)

The way business owners decide to spend PPP money will have a direct effect on our economy and the unemployment rate. Uncertainty is rampant as there have been few recent guidelines released by the U.S. Treasury Department.

Here’s some tips for PPP recipients:

• Set up a separate bank account. For those approved who haven’t received funds, do not “commingle” with other bank account expenses. This is a much cleaner approach.

• Consider ordering paper checks for your new bank account as soon as you have an approved loan reference number to literally create paper trails when spending PPP money. This will be important for loan forgiveness purposes.

• Be careful to meet the 75 percent minimum requirement for payroll costs as defined by the U.S. Treasury and Small Business Association.

• The date you receive funds will generally determine the beginning of your eight-week spending period to accumulate expenses eligible for forgiveness. There is some flexibility to align your spending period start date to coordinate with your payroll date.

For example, you receive funds on June 27 and your June payroll periods were on the first and fifteenth. You can move your spending start date to July 1 to coordinate with your next payroll period.

• Document in writing asking every employee to return to work. There is a “final bailout” that kicks in should an employee refuse to come back to work. If that happens, you will not be penalized for that worker’s refusal to return.

INSURANCE

• AUTO INSURANCE: There has never been a better time to shop your auto insurance, as insurance carriers are dropping rates by different percentages to gain market share. Many carriers have applied discounts on premiums or sent checks back for March and April or April and May.

There are fewer cars on the road, and accident risks have decreased while people shelter at home. Check with your auto agent.

• LIFE INSURANCE: During these difficult times we have seen a large increase in families feeling the need to increase their life insurance. We have providers on our platform that will issue non-medical underwriting (it can be as fast as one to two weeks) policies for people under 60 years old.

Up to $3 million of coverage is available with no direct human contact. Three life insurance companies have announced this week that there will be 10 to 25 percent increase in premiums. I foresee only a two to six-month window to apply before other insurance carriers follow suit, and COVID-19 could be excluded.

HEALTH INSURANCE: Laid off or furloughed workers were allowed to stay on their plan until May 31 without electing COBRA. Due to COVID-19, early refills on prescriptions are permitted. Most health insurance companies have relaxed these rules and will allow you to switch from a 30-day supply to 90 days. Tell your pharmacist to file form SCC13 (submission clarification code 13). Not all pharmacists will be familiar with this code. COVID-19 testing is free from in-network deductibles and copays.

TELEHEALTH: Consulting with a doctor virtually is now accounting for about 80 percent of doctor interaction. I suggest reviewing your policy’s telemedicine co-pay, as they range from free to $40 on most health insurance policies. There are also stand-alone telemedicine plans that can be added to existing group health insurance policies that currently don’t have them.

Robert C. Intelisano (CLU, CSA, LUTCF) is available for pro bono business strategy sessions for all Queens Chamber members at [email protected], or go to InsuranceDoctor.us and complete a simple intake form.

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