Have you been forced to shut down your practice due to the new ADA or local government guidelines?
If so, you’re not alone.
The American Dental Association posted a release on March 16th calling dentists to postpone all elective procedures for three weeks – only opening their clinics for emergency operations. On April 1st, the ADA posted additional guidelines extending the recommended closure until April 30th.
These ADA guidelines are recommendations and may be superseded by state or local mandates, however many municipalities are now strictly enforcing rules that limit gatherings to 10 people or less, and extending the recommended timeline for closures.
Whether you are being proactive and obeying the ADA guidelines, or have been mandated to close your doors, odds are, you have been impacted by the COVID-19 outbreak.
We’ve heard many stories from clients over the last month with details on how these closures have affected their businesses and personal lives. In response, we continually research and do our best to provide resources that will help our clients in the dental industry maintain their practices (and their sanity) through this difficult time.
What Resources Are Available To Dentists Who Have Had To Close Their Practice Due To COVID-19?
Due to the massive economic impact that the novel Coronavirus has had on the economy, the federal government has introduced multiple acts designed to ease the burden on individuals and business owners. So far, the top priority of the federal government has been to help businesses keep paying their employees. Below are two bills that offer support to business owners who maintain their staff:
The Families First Coronavirus Response Act (FFCRA)
The FFCRA was signed on March 18th and has two main sections:
Qualifying Leave for Public Health Emergency – Employees are entitled to up to 12 weeks of paid leave for a “qualifying need related to a public health emergency”. This includes complications related to COVID-19, or caring for a family member who has it.
The act requires employers to pay employees ⅔ of their usual pay after a 10-day elimination period. There is a cap of $200 per employee per day, and a cap of $10,000 in total over the 12-week period.
In order to help employers meet these demands, the federal government is offering a tax credit of 100% of the wages paid under the FFCRA. The credit will be refundable and will be allowed against the employer’s portion of Social Security taxes.
Emergency Paid Sick Leave – Employers must provide employees with two weeks of paid sick leave if the employee cannot work due to a COVID-19-related complication.
Both full and part-time employees qualify, and there is a daily cap of up to $511/day.
Much like the Public Health Emergency leave above, the employer is eligible to receive a refundable tax credit equal to 100 percent of the wages paid under the act.
The Paycheck Protection Program
Starting on April 3rd the Paycheck Protection Program will allow small businesses to take a forgivable loan of up to 2.5x their monthly payroll if they use it to maintain their current staff.
The loan is available to companies with 500 employees or less and is available up to a maximum of $10 million (or 2.5x payroll – whichever is less). If the loan is not deemed qualified, it will incur a 0.5% interest rate, with all payments being deferred for 6 months.
In order to qualify for 100% loan forgiveness on the loan amount spent on the following expenses:
- Payroll costs
- Mortgage interest for business purposes
- Rent paid for your place of business
- Utilities paid for your place of business
- Additional wages to tipped employees
Here is a great resource from the US Chamber of Commerce outlining the details of the program.
The CARES Act also laid out a handful of other stipulations including the ability to take penalty-free withdrawals from your 401k plan, but we highly discourage people from turning to that option.
Know Your Options and Stay Above The Noise
There is a lot going on right now, but this is not a time to panic.
It’s time to become educated and learn the tools available to help keep your practice alive.
Educate your employees on their right to take time off, knowing that you will be refunded for their wages. Encourage them not to make withdrawals from their 401k or to pull out of their investments. Assure your patients that you will make it through this and continue to serve them when it’s all over.
InvestRx is Here To Help
At InvestRx, our mission is to give healthcare professionals peace of mind through relevant and helpful financial advice. If there are topics that you would like to know more about, or if you have a specific question for one of our advisors, please don’t hesitate to reach out.