Alston & Bird’s Coronavirus Flash provides updates on policy and regulatory actions under consideration across many important industries being monitored by our teams. Links to key government and legal resources are provided throughout the report.
UPDATED 9:00 AM ET ON FRIDAY, APRIL 3, 2020
The Latest News
- U.S. COVID-19 cases exceed 244,159 and 6,257 U.S. deaths. (Source: CDC)
- U.S. stock market: Thursday ended with gains in the major U.S. benchmarks, with the Dow up over 460 points, the S&P up over 55 points, and the Nasdaq rising over 125 points.
- The Department of Labor released the data for jobless claims on Thursday and unemployment claims doubled from the previous week to a high of 6.6 million. Kaiser Family Foundation released their latest poll results and 4 in 10 Americans say they already have lost a job or work-related income due to the coronavirus crisis.
- For the second time this week, President Trump has invoked the Defense Production Act and in yesterday’s action he ordered the Secretaries of the Departments of Health and Human Services and Homeland Security to “help domestic manufactures like General Electric, Hill-Rom, Medtronic, ResMed, Royal Philips, and Vyaire Medical secure the supplies they need to build ventilators needed to defeat the virus.”
- For those wanting to understand the Defense Production Act and its use in supply procurement and allocation, read this A&B blog (3/18/20).
- On Thursday, Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza announced that the interest rate on what lenders could charge small businesses for loans in the Paycheck Protection Program would be raised from 0.5% to 1%.
COVID-19 Related Legislation
- Bill 4.0: The President and congressional leaders expand discussions regarding what components might be in the of the next emergency response bill.
- The President first raised the possibility of including infrastructure priorities earlier in the week, and House Speaker Nancy Pelosi (D-CA) concluded a discussion with Treasury Secretary Mnuchin on Thursday acknowledging that the next bill may include infrastructure spending, including water projects, broadband, and transportation.
- Congressional Democratic leadership has said the next package should include additional assistance for community health centers, housing, and education Senate Minority Leader Chuck Schumer (D-NY) has stressed the importance of providing greater assistance for health care workers, possibly hazard pay for federal and health care workers. The President has speculated that hazard pay for health care workers is something he would consider.
- Bill 3.0: Coronavirus Aid, Relief, and Economic Security (CARES) Act, (R. 748) passed on March 27. The CARES Act is a $2.2 trillion-dollar package includes $500 billion in financial assistance for distressed businesses, $349 billion in low-interest small business loans, and $100 billion in financial assistance for Medicare/Medicaid enrolled healthcare providers and suppliers. The bill also includes $1,200 in financial assistance for the lowest income taxpayers, an additional 13 weeks of unemployment compensation benefits, and an employee extension credit.
- A congressional section by section summary is available here.
- A&B detailed summaries are below:
- A&B Summary – CARES Act Health Provisions
- A&B Overview – CARES Act Health Care Grants and Reimbursement Changes
- A&B Overview – CARES Act Key Health Care Appropriations
- A&B Summary – CARES Act Funding Sources (Updated 4/2/20):
- $367 billion for Small Business Administration
- $500 billion for the Treasury’s Business Stabilization Loan Fund
- Tax Credits and Other Potentially Beneficial Tax Considerations
- Paycheck Protection Loan program additions
- A&B Summary – CARES Act Small Business Provisions
- A&B Summary – CARES Act Educational Provisions and Appropriations
- A&B Summary – CARES Act Individual and Business Tax Provisions (New)
- A&B Summary – CARES Act Unemployment Provisions (New)
- A&B Summary – CARES Act Labor Provisions (New)
- A&B Tracking Document of COVID-19 Health Care Provisions Impacting Hospitals from all three bills (New)
- Congress has passed three coronavirus emergency response bills and the first two are below:
- Bill 1.0: Coronavirus Preparedness and Response Supplemental (CPPRS) (R. 6074) passed on March 5.
- Bill 2.0: Families First Coronavirus Response Act (FFCRA) (R. 6201) passed on March 18.
- Speaker Pelosi announced the formation of a special bipartisan oversight panel to be called the House Select Committee on the Coronavirus Crisis. It will be chaired by house Majority Whip Jim Clyburn (D-SC) and will be dedicated to ensuring that the $2 trillion already allocated is “spent wisely and effectively” according to the Speaker’s announcement.
Key Administrative and Regulatory Actions
- President Trump declared (3/13/20) a national emergency under the Stafford Act, which allows the federal government to marshal additional resources and authorize greater regulatory flexibility to respond to the coronavirus outbreak.
Department of Commerce
- Department of Commerce (DOC) Bureau of Industry and Security posted a statement describing the structure of the Defense Priorities and Allocations System (DPAS) and the authority delegated to other agencies. The statement links to a DPAS training Course to assist a company that receives priority rated contracts, subcontracts, or purchase order from the U.S. government or its contractors.
Department of Defense
- The Office of the Under Secretary of Defense released a memo (4/2/20) stating that DoD contracts contain clauses that provide “that a contractor will not be in default because of a failure to perform the contract if the failure arises beyond the control and without the fault or negligence of the contractor.”
- The President announced an executive order (3/30/20) to order up to 1 million Ready Reserve members to active duty for up to two years at a time to assist the nation in this national emergency. He authorized 100% federal cost-sharing for the governors of Connecticut, Illinois, Michigan, Florida, Louisiana, Maryland, Massachusetts, New Jersey, Guam, and Puerto Rico to use National Guard to support state and local emergency assistance for 30 days.
- The Army Corps of Engineers released a draft (3/23/20) request for proposals for companies to submit bids with capabilities to convert hotel space to an acute alternate care facility to support treatment for COVID-19 patients.
Environmental Protection Agency
- On April 2, 2020, the EPA revised List N: Disinfectants for Use Against SARS-CoV-2 to include products on EPA’s List G: Products effective against norovirus, and List L: Products effecting against the Ebola virus, as EPA has determined that these products also meet its criteria for use against SARS-CoV-2. There are now 357 disinfectants on List N. EPA has updated the List to include the specific types of surfaces products can be used on, such as hard or soft surfaces; use sites, such as hospital, institutional or residential; and whether a product can be applied by fogging.
- The EPA will temporarily allow (3/31/20) manufacturers of already-registered EPA disinfectants on EPA’s List N: Disinfectants for Use Against SARS-CoV-2 to obtain certain active ingredients from any supplier without checking with the agency for approval.
- EPA issued an enforcement memo, “COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program” (3/26/20), detailing the Agency’s plan to exercise enforcement discretion for situations related to COVID-19. The policy is retroactive to March 13.
- EPA will not seek fines and penalties for missed deadlines in routine monitoring, testing, and reporting; settlement agreements; and consent decrees, and for excess emissions, so long as the company documents in detail that it was related to COVID-19 and takes every effort to meet compliance obligations. EPA must be notified of emission exceedances.
- EPA is allowing hazardous generators to store additional waste onsite, for longer periods of time, without requiring a permit or changing generator status.
- For animal feeding operations, the inability to transfer animals off-site will not trigger regulation as a CAFO, or a larger-categorized CAFO.
- EPA may offer “No Action Assurance” to operators of some critical infrastructure facilities, on a case-by-case basis.
- Public water systems are excluded from this policy.
- EPA also issued a warning to pesticide producers, manufacturers, distributors, and importers who claim their products can be used against COVID-19: ensuring companies comply with all applicable requirements for pesticide products – including prohibitions on false and misleading claims – will be the agency’s “focus” in order to protect public health.
- EPA is allowing manufacturers of disinfectants to obtain certain inert ingredients and inactive ingredients from different suppliers without checking with the agency for approval.
- EPA created a website, Coronavirus and Drinking Water and Wastewater, which states that the risk to water supplies from the COVID-19 virus is low, and “Americans can continue to use and drink water from their tap as usual.”
Department of Health and Human Services
- On March 25, pursuant to the President’s Executive Order, the Department of Health and Human Services (HHS) announced its initial list of health and medical resources that are subject to hoarding prevention measures. The list is subject to review and potential additions later. It includes several varieties of facial masks and other protective equipment, respirators, ventilators, drugs, and disinfectants.
- HHS has unveiled a new COVID-19 Resources page.
- The HHS Office of Civil Rights announced that it will exercise its enforcement discretion and will not impose penalties for violations of certain provisions of the HIPAA Privacy Rule again health care providers or their business associates for the good faith uses and disclosures of protected health information (PHI) by business associates for the public health and health oversight activities during the COVID-19 nationwide public health emergency. This notice is effective immediately.
- HHS announced (3/24/20) $250 million in grants for meal programs for older adults. The program is administered through the Administration of Community Living (ACL), and funding was provided through the FFCRA legislation passed in March.
- HHS Office of Inspector General (OIG) has posted a fraud alert video (3/23/20) to educate the public about scammers offering COVID-19 tests in exchange for personal details of Medicare beneficiaries.
Assistant Secretary for Preparedness and Response
- ASPR announced (3/24/20) it was providing $100 million in awards for health systems to prepare for COVID-19 patients.
- ASPR announced (3/22/20) the funding of a phase 2/3 clinical trial in a joint partnership with Regeneron Pharmaceuticals to develop a potential treatment for COVID-19.
Centers for Disease Control and Prevention
- For the most up to date CDC guidance visit here.
- The CDC updated its recommendations on optimizing the supply of PPE on Thursday.
- On March 25, the CDC published two preparedness checklists: one for health care professionals and one for hospitals.
- The CDC released guidance (updated 3/24/20) on COVID-19 testing priorities. Priority 1 is limited to hospitalized patients and symptomatic workers. Priority 2 is limited to symptomatic persons who live in nursing facilities, are 65 or older, have underlying medical conditions, or are first responders.
- The CDC also updated its infection control
- The CDC’s FAQs (3/22/20) for health professionals
Centers for Medicare & Medicaid Services
- CMS has created a website location for COVID-19 stakeholder call recordings and transcripts, and daily CMS COVID-19 news alerts can be found here.
- Late Thursday, CMS issued recommendations to nursing homes and state and local governments on infection control in long term care. The recommendations include:
- Nursing homes should immediately ensure that they are complying with all CMS and CDC guidance related to infection control.
- CMS/CDC urges State and local leaders to consider the needs of long-term care facilities with respect to supplies of PPE and COVID-19 tests.
- Nursing homes should immediately implement symptom screening for all staff, residents, and visitors – including temperature checks.
- Nursing homes should ensure staff are using appropriate PPE, to the extent PPE is available and per CDC guidance on conservation of PPE.
- CMS announced on Monday (3/30/20) that it will suspend audit activity, stating that, “The agency will continue to engage in oversight activities but will suspend requesting additional information from providers, healthcare facilities, Medicare Advantage and Part D prescription drug plans, and States.”
CMS CARES Act Guidance
- In response to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), CMS continues to release guidance required under the Act:
- On Monday, sweeping changes were announced by CMS in response to requirements of the CARES Act. The changes are summarized in this CMS release. The new waivers and flexibilities for health care providers are outlined by CMS in the following:
CMS new waivers and flexibilities:
Provider-specific fact sheets on new waivers and flexibilities:
- Need a deeper dive on these new waivers?
- The EMTALA waiver provides greater flexibility for hospitals to manage medical screening examinations (MSEs). For additional analysis, read this A&B advisory (4/1).
- CMS also announced blanket waivers of sanctions imposed under the physician self-referral laws. For a detailed discussion of this issue, read this A&B advisory (4/1)
- The telehealth expansion waiver, which was originally expanded in the Coronavirus Preparedness and Response Supplemental Act (1.0), was further expanded in the CARES
- CMS released an information bulletin (4/2/20) on telehealth for Medicaid substance use disorder services.
- The full details of the latest telehealth changes are discussed in this A&B advisory (3/31/20).
- Telehealth guidance (3/17/20) was announced last week broadening access to Medicare telehealth service regardless of patient residence and covering a wide range of services. The telehealth waiver has been expanded; states can cover telehealth without approval, and HIPAA rules will be relaxed, and penalties waived. Factsheets related to these changes:
- CMS issued an electronic toolkit regarding telehealth and telemedicine for Long Term Care Nursing Home Facilities (3/28/20)
- CMS telehealth FAQs (3/17/20)
- HHS 1135 HIPAA waiver factsheet - HIPAA Security Rule safeguards
- HHS Notice of Enforcement Discretion factsheet
- HHS Office of Civil Rights bulletin
- Guidance on Business Associate Agreements
- The CARES Act required CMS to expand its accelerated and advance payment program, and on March 28 a statement and fact sheet were released providing guidance on the policy. For additional analysis, read this A&B advisory (3/30/20) on the CMS guidance.
- CMS released an announcement on Monday pausing certain parts of Review Choice Demonstration in all states, in response to the COVID-19 emergency. Claims subject to the demonstration (all choices) will go through post payment review at a later date, though providers can still request pre-claim review if they choose.
- CMS, on behalf of Vice President Mike Pence, sent a letter (3/30/20) to the nation’s hospitals requesting (not requiring) they report data, including on testing, bed capacity, and supplies connection with their efforts to fight the COVID-19 pandemic.
- The CMS Center for Clinical Standards and Quality (CCSQ) issued a memorandum (3/26/20) stating that under the Clinical Laboratory Improvement Act (CLIA) the agency would allow laboratories to utilize temporary testing sites, such as the pathologist’s home, for remote review and reporting of slides/images as long as specific criteria are met.
- On 1135 Waivers: Further information continues to be released on blanket waivers after the initial guidance (3/13/20) response to the national emergency executive order.
- CMS issued provider enrollment FAQs for 1135 blanket waiver, available here (3/22/20).
- In addition, there is an FAQ on telehealth services (Q11) and requirements if a practitioner seeks to furnish Medicare telehealth services from his or her home.
- CMS has approved 41 states for coronavirus 1135 waivers, and for more details and the full list CMS approved 1135 waivers can be found here. And on March 27, CMS announced the approval of 16 state hospital associations. The approval letter and attachment can be found here and additional information.
- The National Uniform Billing Committee has provided guidance on claims for COVID-19 treatment and approved the use of DR (disaster related) condition code for services related to the coronavirus.
- On March 25, CMS announced it did not have the authority to waive Open Payment reporting requirements, and the March 31 deadline remains in place.
- CMS released several other alerts and guidance the week of March 23:
- Medicare Provider Enrollment Relief FAQs (see: FAQs).
- CMS posted guidance on Payment and Grace Period Flexibilities for issuers offering coverage on the federally-facilitated exchanges and state-based exchanges on the federal platform (see: guidance).
- CMS announced it will be exercising enforcement discretion so QHP issuers and SADPs can extend payment deadlines for initial binder payments and ongoing premium payments. CMS released FAQs on availability and usage of telehealth through private health insurance (see: FAQs).
- CMS released FAQs on prescription drugs and COVID-19 for health insurance issuers in individual and small group markets (see: FAQs).
- CMS announced (3/22/20) relief for providers participating in quality reporting programs, including granting exceptions from reporting requirements and extensions for clinicians and providers participating in Medicare quality reporting programs for the upcoming measure and data submission for those programs. The release includes tables listing the impacted programs and extensions.
- On March 24, CMS posted notice that it had withdrawn its proposed rule to tighten Medicaid eligibility
- CMS released guidance (3/24/20) implementing provisions of the FFCRA that provide states with enhanced federal Medicaid funding referred to as the Federal Medical Assistance Percentage (FMAP) funding during the COVID-19 emergency.
- CMS released new tools (3/20/20) for state Medicaid and Children’s Health Insurance Programs (CHIP) and updated FAQs (3/18/20). The tools include:
- 1115 Waiver Opportunity and Application checklist;
- 1135 Medicaid and CHIP Waiver checklist;
- 1915(c) Appendix K template; and
- Medicaid Disaster State Plan Amendment template.
- CMS announced (3/19/20) that the implementation of the Minimum Data Set 3.0 v1.181 for nursing home and swing bed providers set for October 1, 2020 was now delayed.
- To clarify COVID-19 coverage for the diagnosis and treatment, CMS released FAQs (3/18/20) on Catastrophic Health Coverage; the agency states that it will not bring enforcement action against any health issuer that amends its catastrophic plans to provide coverage without imposing cost-sharing requirements for COVID-19 related services before an enrollee meets the catastrophic plan’s deductible. CMS also notes that the use of enforcement discretion and the FAQs issued align with the IRS guidance released (3/11/20) which provides flexibility to high deductible plans to provide COVID-19 health benefits without applying a deductible or cost-sharing.
- CMS announced (3/23/20) it will limit its nursing home inspection protocol to focus more specifically on complaint and infection control inspections.
- CMS released guidance (3/17/20) to Program of All-Inclusive Care for the Elderly (PACE) Organizations.
- Health care providers with exposure to COVID-19 raises numerous serious questions and to better understand these considerations for health care workers and their employees, read this A&B advisory (3/24/20).
Food and Drug Administration
- FDA provides a daily roundup on COVID-19 related April 2 actions.
- FDA has provided updated guidance to address the need for blood donations during the coronavirus crisis, including immediate changes to the eligibility criteria.
- FDA continues to issue emergency use authorizations for ventilators, PPE, diagnostic tests, and on April 1, the first COVID-19 test that looks for antibodies in the blood was authorized for treatment of COVID-19.
- For a deeper dive on FDA accelerated approval process for COVID-19 tests, see this advisory.
- In a press release on Tuesday, FDA announced the Coronavirus Treatment Acceleration Program (CTAP), a new program to expedite the development of potentially safe and effective life-saving treatments.
- On April 1, FDA released a temporarily enforcement discretion policy to provide flexibility to chain restaurants and similar retail food establishment subject to FDA’s menu labeling requirements. Under its policy, FDA will not object if covered establishments do not comply with menu labeling requirements until “conclusion of the public health emergency.”
- FDA has issued enforcement policies to increase the availability of ventilators and accessories, face masks and respirators, gowns, other apparel and gloves, and sterilizers, disinfectants and air purifiers.
- An A&B analysis of the agency’s FAQs regarding the growing shortages of personal protective equipment is available here.
- FDA has provided strategies to assist in the conservation of masks and gowns, as well as glove conservation strategies.
- FDA has postponed most foreign and domestic inspections, for all FDA-regulated products, including drugs, devices, biological products, foods, animal feed, and tobacco. For a deeper dive on industry considerations to these delays, review these A&B advisories on domestic inspections and foreign inspections.
- FDA issued guidance on notifying FDA of permanent discontinuation or interruption in manufacturing.
- The CARES Act includes OTC drug reform that would create an OTC drug user fee system, ensure FDA can approve OTC medicines without going through a full notice and comment rulemaking and allow for 18-month exclusivity for certain OTC drugs.
- In the midst of ongoing food safety concerns, DHS has included the food and agriculture sector as “essential critical infrastructure,” and a full analysis of these issues is available here.
- Both USDA FSIS and FDA have issued enforcement discretion policies to provide labeling flexibilities for products intended for food service going to retail.
- FDA has announced a temporary policy to not enforce Foreign Supplier Verification Program (FSVP) onsite audit requirements under specific circumstances, and both FDA and USDA have also been issuing guidance to industry that addresses food safety concerns. DHS has included the food and agriculture sector as “essential critical infrastructure,” and a full analysis of these issues is available here.
- FDA previously issued, “FDA Guidance on Conduct of Clinical Trials of Medical Products during COVID-19 Pandemic,” to assist sponsors in assuring the continued safety of trial participants, while minimizing risks to trial integrity, and maintaining compliance with good clinical practices (GCPs) during the pandemic. Included in the new guidance are the options for phone contact and virtual visits in clinical trials.
Health Resources and Services Administration
- HRSA updated its FAQs (4/2/20) for health centers with additional questions to address the Federal Tort Claims Act among other flexibilities that have been enacted.
- HRSA awards (3/24/20) $100 million to 1,381 health centers across the country with funding provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020. The awards, by state, is available here.
- HRSA released guidance (3/27/20) noting the COVID-19 public health emergency warranted additional flexibilities regarding 340B covered entities, including allowing self-reporting of patient identity, condition, and history for purposes of 340B record keeping requirements.
- HRSA released waiver (3/25/20) of the Paperwork Reduction Act.
Department of Homeland Security/FEMA
- The Department of Homeland Security (DHS) and Department of Justice announced on Wednesday that they have extended the temporary postponement of Migrant Protection Protocols (MPP) hearings scheduled through May 1, 2020.
- DHS announced (3/26/20) that the deadline to enforce REAL ID requirements would be delayed 12 months to October 1, 2021.
- The Cybersecurity and Infrastructure Agency (CISA) released updated guidance (3/28/20) on essential critical infrastructure workers.
- Federal Emergency Management Agency’s (FEMA) Supply Chain Task Force has developed a four-pronged approach to securing needed coronavirus supplies. The four prongs are Preservation, Allocation, Acceleration, and Expansion. The details on the March 30 plan can be found here. In a related move, the FEMA Coronavirus Pandemic Supply Chain Stabilization Task Force (a joint FEMA and HHS initiative) has released a fact sheet.
- FEMA has established How to Help website for individuals and organizations interested in helping the effort to combat the spread of COVID-19. Examples of assistance offered include:
- To sell medical suppliesor equipment to the federal government, please submit a price quote under the COVID-19 PPE and Medical Supplies Request for Quotation. Full details can be found in the solicitation (Notice ID 70FA2020R00000011).
- If you havemedical supplies or equipment to donate, please provide us details on what you are offering.
- If you are a private company that wants to produce a product relatedto the COVID-19 response – email email@example.com.
- If you are a hospital or healthcare provider in need of medical supplies, please contact your state, local, tribal or territory department of public health and/or emergency management agency.
- If you are interested in doing business with FEMA and supporting the response to COVID- 19 with your company’s non-medical goods and/or services, please submit your inquiry to the Department of Homeland Security (DHS) Procurement Action Innovative Response Team (PAIR) team at DHSIndustryLiaison@hq.dhs.gov.
- FEMA provides guidance (updated regularly) to companies seeking to import or manufacture medical products to the COVID-19 response. A list of FEMA regional private sector contacts and state contacts can be found here.
Department of Justice/Federal Trade Commission
- On April 1, the Department of Justice (DOJ) announced that it is making $850 million available to help public safety agencies respond to the coronavirus outbreak.
- On March 23, President Donald Trump released an Executive Order on hoarding and price gouging of critical COVID-19 supplies. For guidance and tips on how businesses can respond if they are victims of price gouging, read this A&B advisory (3/26/20).
- On April 2, the FTC and FDA sent letters to three companies for selling fraudulent COVID-19 products, as part of the agencies’ effort to protect consumers. (Letters available here, here, and here). This is the third time the FTC sent warning letters to companies for their actions related to the pandemic.
- On March 27, the FTC sent letters to nine VoIP providers and other companies warning them that “assisting and facilitating” illegal telemarketing or robocalls related to the Coronavirus pandemic, including by providing VoIP services, is against the law. Earlier in March, the FTC and FDA sent warning letters to seven companies about unsupported claims that products can treat or prevent Coronavirus.
- The FTC Chairman Joe Simons issued a statement (3/26/20) outlining the agency’s efforts to protect consumers during the Coronavirus pandemic. Simons also acknowledged the challenges businesses face in getting important goods and services to people across the country, and that the agency would be “flexible and reasonable” in enforcing compliance requirements. He also announced an email address for businesses seeking guidance: firstname.lastname@example.org, noting FTC staff would respond to inquiries as quickly as possible.
- On March 25, the FTC released business guidance warning against various scams seeking to exploit companies’ concerns around COVID-19. Scams the FTC warns against include a variety of robocall and email-related phishing scams (including through emails purporting to come from company CEOs or IT departments, or government agencies), and fraudulent websites that mimic legitimate online retailers. The alert also provides advice on how companies can keep their networks safe.
- DOJ Antitrust Division and Federal Trade Commission (FTC) announced (3/24/20) they will be expediting their usual antitrust business review letter/informal opinion process on competitor collaborations to be done within 7 days (as opposed to the usual many months) of submission of information. It will be available to entities proposing to collaborate on public health projects responding to the virus, including health care providers and other suppliers of relevant goods and services.
- Coronavirus challenges grow for companies responding to issues like the new expedited government review process. For practical advice on avoiding antitrust risk, review this A&B advisory. (3/24/20)
- The DOJ filed its first enforcement action (3/21/20) against COVID-19 fraud, successfully obtaining a temporary restraining order against the operators of the website, “coronavirusmedicalkit.com.”
- For a deeper dive in how federal agencies will review merger transactions during the coronavirus pandemic, read this A&B advisory. (3/19/20)
- Federal antitrust agencies to extend merger reviews. The DOJ announced (3/17/20) it will be asking some merging parties to voluntarily grant the DOJ an additional 30 days to investigate. This comes one day after the director of the Federal Trade Commission’s (FTC) Bureau of Competition posted a notice (3/16/20) explaining that parties should expect the FTC to reach out to discuss “appropriate modifications of statutory or agreed-to timing arrangements” in its antitrust investigations, while reserving the right to seek court relief if extensions are not provided. The agencies began receiving federal pre-merger notification (Hart-Scott-Rodino Act) filings exclusively via electronic submission and announced (3/17/20) that no “early terminations” will be granted until further notice. Therefore, even transactions that don’t pose significant antitrust concerns cannot close before the expiration of the full statutory waiting period (typically 30 days).
- Understanding how federal agencies will review merger transactions during the coronavirus outbreak has business and legal implications. The A&B Mergers & Acquisitions Group examines (3/19/20) what you need to know.
- Mortgage-backed and asset-backed securities are beginning to feel the impact of the coronavirus outbreak. To understand the basic disclosure and diligence issues to consider with any securitization, read this advisory. (3/17/20)
Department of Labor
- The Department of Labor (DOL) provided FAQs further clarifying paid leave requirements under the new Families First Coronavirus Response Act. A&B’s Labor and Employment Group provides an overview of the FFCRA and an updated collection of responses to some of the most common questions about employer obligations in this advisory (3/31/20).
- The DOL posted (3/26/20) the required employee notice that must be provided by covered employers to their employees regarding the new paid leave requirements as required by the Families First Coronavirus Response ActThe posted page contains the link to the poster itself, as well as a new Q&A that focuses exclusively on guidance about posting the notice, particularly in light of the fact that many employees are working remotely. Covered employers should make sure they get this notice posted appropriately no later than the April 1 effective date of the new leave requirements.
- DOL released its first round of guidance (3/24/20) with fact sheets for employers and employees.
- DOL released a statement (3/9/20) which includes an overview of key COVID-19 related DOL and Occupational Safety and Health Administration (OSHA) documents which includes:
- OSHA’s practical guidance (3/21/20) to prevent the spread of COVID-19
- OSHA’s COVID-19 website (3/20/20)
- Wage and Hour Division (WHD) guidance (3/24/20)on Families First Coronavirus Response Act (FFCRA): Employee Paid Leave Rights
- WHD guidance (3/24/20) on FFCRA: Employer Paid Leave Requirements
- WHD FAQs (3/24/20) on COVID-19 and the Fair Labor Standards Act
- WHD FAQs (3/24/20) on COVID-19 and the Family and Medical Leave Act
- Trying to make sense of all these changes? A&B provides brief overviews of what you need to know:
- DOL has released additional questions and answers as guidance for the provisions required by FFCRA. A&B provides a complete overview and analysis (3/31/20).
- Coronavirus Impact on Health Benefits: A Deeper Dive (3/20/20)
- Employee Leave Requirements Under FFCRA advisory (3/19/20)
- COVID-19 FAQs (3/19/20) for Employers
- DOL/OSHA updated its website, clarifying that no special precautions (beyond existing requirements) are required for municipal solid waste and recycling suspected or known to contain or be contaminated with COVID-19.
- Large employers are assessing policies and potential liability to ensure a safe and secure workplace. The CDC has released (updated 3/21/20) guidance for employers related to employee information on COVID-19.
Securities and Exchange Commission
- The Securities and Exchange Commission Chairman confirmed in a statement that the June 30, 2020 compliance date for the Regulation Best Interest (Reg BI) and Form CRS remains in effect. The A&B Financial Services & Products Group analyzes compliance with Reg BI and Form CRS mandates in this A&B advisory (4/2/20).
- The SEC issued an amended order (3/25/20) extending the relief available to some companies that cannot timely file their reports due to concerns, including the need to update risk disclosures in response to business threats. To understand this extension and other new orders from the SEC, read this A&B advisory.
- The A&B Securities Group examines (3/27/20) the SEC’s continued efforts to provide relief to filers whose filing obligations have been affected by the pandemic.
- The SEC issued Disclosure Guidance Topic No. 9 (3/25/20) on the SEC’s current views regarding disclosure and other securities law obligations that companies should consider with respect to COVID-19 and related business and market disruptions.
- The SEC expects filers to disclose the known, likely to be known, and unknown risks they face during the coronavirus pandemic and to better prepare, read these A&B questions to ask yourself (3/30/20).
- The SEC also issued a statement (3/24/20) regarding the authentication document retention requirements under the SEC rules in light of health, transportation, and other logistical issues raised by the spread of COVID-19.
- Companies will need to vigilantly monitor insider trading despite the SEC’s statements on relaxed disclosure and other regulations. These issues are examined in this A&B advisory (3/26/20).
Small Business Administration
- Small Business Administration (SBA) – In response to the CARES Act requirements, the SBA provided guidance for loans under the Paycheck Protection Program, the Economic Injury Disaster Loan Program, and the Express Bridge Loan Pilot Program (4/1/20) for qualified entities that are impacted by COVID-19.
- On April 2, the SBA released the interim final rule (New) implementing the Paycheck Protection Program.
- Complete details on the SBA CARES Act programs:
- A top-line overview.
- If you are a lender, your information is here.
- If you are a borrower, your information is here.
- Final borrower application form (New).
- Lender electronic data form (New).
- For a deeper dive on the funding streams available for SBA loans in the CARES Act, review this A&B publication (4/1/20).
- Businesses large and small are navigating the chaotic economic climate; find some important actions you can take now to better prepare here (3/30/20), and for additional insights on lending and regulatory concerns, read this A&B advisory. (3/30/20)
Department of Treasury
- The Department of Treasury website for CARES Act
- The FFCRA gives businesses with fewer than 500 employees funds to provide employees with paid sick leave and family and medical leave related to COVID-19. On April 1, the Department of Treasury and IRS released FAQs regarding the tax credits available under this Act.
- On Wednesday, the Treasury Department and the IRS launched the Employee Retention Credit, designed to encourage businesses to keep employees on their payroll. Eligible employers that have been financially impacted by COVID-19 can receive 50% of up to $10,000 in wages paid.
- The CARES Act establishes a $349 billion Paycheck Protection Program and on Tuesday the Department of Treasury jointly with the Small Business Administration announced the details. A brief overview and separate fact sheets for the lenders and the borrower can be found here.
- On Monday, the Treasury Department provided the details on the Economic Impact Payments program up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child. This program was also required by the CARES Act.
- On Wednesday, the Department of Treasury and the IRS announced that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive an Economic Impact Payment. Instead, payments will automatically be deposited into their bank accounts.
- The Treasury Department announced (3/31/20) it was delaying tax payment due dates for wine, beer, distilled spirits, tobacco products, firearms, and ammunition excise taxes, to provide flexibility for businesses that have been negatively affected by COVID-19. The postponement of due dates applies to any tax payment with an original due date falling on or after March 1, 2020, through July 1, 2020.
- The Federal Reserve committed (3/23/20) to using its full range of tools to support households, businesses, and the U.S. economy overall in this challenging time.
- Government required stay-at-home orders have forced people to give significant focus on the use of electronic signatures and the maintenance of electronic records. This A&B advisory (3/27/20) reviews the three main laws that govern electronic signatures.
- In a joint statement (3/22/20), the federal financial institution regulatory agencies and state banking regulators encouraged financial institutions to work constructively with borrowers affected by COVID-19 and provided additional information regarding loan modifications.
- To understand the federal regulators guidance on loan modifications and reporting, see this A&B advisory. (3/24/20)
- Internal Revenue Service (IRS) granted further COVID-19 emergency relief in Notice 2020-18 (superseding its prior announcement) delaying the due date for filing Federal income tax returns and making Federal income tax payments from April 15, 2020 to July 15, 2020. The deadline is automatically postponed with no need for taxpayers to file Forms 4868 or 7004. Unlike prior guidance, there is no limitation on the amount of tax payments that may be deferred until July 15, 2020. Read here for both guidance and FAQs.
- The IRS has issued the following tax season guidance:
- Coronavirus Tax Relief. (3/13/20)
- IRS Operations During COVID-19: Functions continue guidance. (3/24/20)
- Filing and payment deadlines FAQs. (3/13/20)
- The Department of Housing and Urban Development announced set of mortgage payment relief options for single family homeowners with FHA-insured mortgages who are experiencing financial hardship as a result of the coronavirus pandemic. Mortgage servicers are instructed to:
- Offer forbearance—deferred or reduced mortgage payment options—for up to six months to affected borrowers;
- Delay submitting Due and Payable requests for Home Equity Conversion Mortgages by six months; and
- Extend any flexibility they may have under the Fair Credit Reporting Act relative to negative credit reporting actions.
- The Department of Transportation’s Federal Transit Administration announced $25 billion in federal grant funding on Thursday to help the nation’s public transportation systems under the CARES Act.
- The Department of Education released a proposed regulation on Thursday (4/2/20) amending eligibility requirements for faculty and student interactions in online college programs. Members of the public will have 30 days to submit comments on the Education Department’s proposal before it issues a final rule.
- The Department of Education also announced new federal deadline flexibility for Career and Technical Education leaders on Wednesday.
- Companies with multistate unclaimed property reporting obligations need to understand the state agency impacts of COVID-19 (agency closures, extended annual report filing deadlines, how to request extensions, etc.) – for more information see this COVID-19 Multistate Unclaimed Property Impacts Tracker.
- On March 31, the S. Patent and Trademark Office (USPTO) announced extensions to the time allowed to file certain patent-related and trademark-related documents and to pay certain required fees. For additional details on this topic, review this A&B advisory (4/2/20).
- The Federal Communications Commission (FCC) provided relief on Wednesday to enable rural broadband and phone providers to immediately waive consumer fees, including late payment and installation and cancellation fees, in order to help Americans work from home or access remote learning.
- The FCC adopted a program for $200 million in COVID-19 telehealth grants and $100 million in grants through the Connected Care Pilot Program to assist hospitals, and other health care providers cover telehealth costs. The funds for both were authorized by the CARES Act.
- The Department of Veterans Affairs (VA) released a statement on Tuesday that veterans continue to receive benefits and services after the Veterans Benefits Administration (VBA) temporarily closed its56 regional offices to the public in response to COVID-19.
- Federal Motor Carrier Safety Administration (FMCSA) has exempted waste haulers from hours-of-service (HOS) regulations in its Expanded Emergency Declaration.
- Restrictions have also been lifted in states such as AL, MA, and TX.
- The NWRA asked the Federal Highway Administration (FHWA) to issue guidance to states to allow hauling of extra heavy loads of COVID-19 waste via special permits.
- States including MD, NE, ND, TN, and VA have lifted weight restrictions for overweight trucks transporting waste. States including AL, CA, CT, IA, KY, OK, and TN have issued extensions on Commercial Drivers Licenses (CDLs).
- The Department of Agriculture Rural Development Division has launched a resource page to help rural residents, farmers, and businesses stay current on the Agency actions related to COVID-19.
- The Commodity Futures Trading Commission (CFTC) issued a no-action letter (3/20/20) offering temporary relief to commodity pool operators (CPOs) from certain obligations under the Commodity Exchange Act and CFTC regulations. A deeper dive on whether this guidance to allow commodity pool operators to delay their reporting obligations during the coronavirus pandemic can be found here. (3/23/20)
- Construction Industry: The coronavirus pandemic creates special problems for the construction industry which include site safety and contractor and subcontractor responsibilities for such. These issues and more are examined in this A&B advisory.
- For the five best practices in preparing construction sites for COVID-19 read this A&B advisory (3/19/20) on the five best practices.
- Construction contracts: The availability of force majeure and other related doctrines to excuse contractual performance is examined here (3/23/20).
Trade and International Business Issues COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle
- As White House Delays on Tariff Deferrals, Lobbying Continues. As importers wait to hear whether duties can be deferred for 90 days after goods enter the U.S., the U.S. Chamber of Commerce said doing so would help businesses big and small with liquidity. Chamber Vice President said in a statement: “tariff relief would provide some welcome breathing room for American businesses and consumers. ... In addition, the Chamber continues to urge USTR to automatically extend all the exclusions to the Section 301 tariffs that are slated to lapse in the coming months.”
- Energy groups push for Jones Act waiver instead of tariffs to counter market volatility. Energy industry groups are urging the Trump administration to issue waivers to the Jones Act as a means to counter market volatility created by Russia and Saudi oil overproduction and a drop in demand caused by the coronavirus-related economic crisis, counseling against tariffs on oil called for by some U.S. lawmakers. Industry executives are expected to meet with President Trump on Friday.
- Services industries call on governments to help supply chains. The Global Services Coalition on Wednesday contended that many services industries remain essential during the global pandemic, asking governments to facilitate those services by allowing cargo flights to continue, ensuring travel restrictions don’t prohibit service providers and protecting the free flow of data, among other actions.
- Launching of CBP’s COVID-19 Updates and Announcements Webpage. CBP launched a CBP COVID-19 Updates and Announcements webpage specifically dedicated to the most recent trade-related information and messaging on the impacts of COVID-19.
- An analysis of the impact of COVID-19 on companies and their critical offshore service providers is discussed in this A&B advisory (4/2/20).
- G20 trade leaders commit to WTO-consistent measures in response to COVID-19. Trade ministers from G20 countries on Monday, March 30 said any “emergency measures” to address the coronavirus pandemic must be temporary and consistent with World Trade Organization rules. In a March 30 joint statement following a virtual meeting, trade officials pledged to “take immediate necessary measures to facilitate trade” in medical supplies and equipment as well as critical agriculture products.
- On March 25, Washington joined other state lawmakers, including those in California and New York, in requiring insurers to: (1) submit data regarding the volume of business interruption coverage, contingent business interruption coverage, and supply chain coverage written by the insurer that was in effect as of March 15, 2020; (2) explain the coverage each policy provides relating to COVID-19; and (3) provide an explanation of benefits to policyholders and the Commissioner’s office. Responses are due on or before April 1, 2020.
- New York City and New Orleans have both issued civil authority shutdown orders that explicitly provide that COVID-19 may spread from “surface to person . . . causing property loss and damage in certain circumstances.” These provisions appear calculated to provide future litigants with a plausible hook to argue for business interruption coverage where such coverage is contingent on the existence of “physical damage.”
- Meanwhile, on March 27, New York joined New Jersey, Ohio and Massachusetts in proposing legislation requiring insurers to provide business interruption coverage for losses relating to the COVID-19 pandemic. The New York bill tracks the New Jersey and Ohio proposals (the Massachusetts proposal is more expansive). If passed, the New York bill would apply to insureds with fewer than 100 full-time employees and it does not expressly purport over-ride explicit policy exclusions for infectious diseases or virus contamination.
- The West Virginia Insurance Commissioner published a bulletin on March 26, 2020 explaining that though business interruption policies are governed by contract law that may vary state-by-state, they “were generally not designed or priced to provide coverage against communicable diseases, such as COVID-19, and therefore usually include exclusion for that risk.” The Commissioner directs insureds and policyholders to contract their insurer regarding availability of coverage, and explicitly prohibits insurers from reporting “negative claims activity or a claim denial when an insured or policyholder contacts the company or its agent or broker to inquire about business interruption coverage for COVID-19 under its policy.”
- Additional lawsuits have been filed against insurers challenging denials of claims filed for business interruption coverage in connection with the COVID-19 pandemic. These suits follow actions filed last week for declaratory judgment querying the availability of business interruption and civil authority coverage in the wake of COVID-19 filed in state courts in Louisiana, Oklahoma, and California.
- On March 26, Barbara Lane Snowden filed suit for breach of contract in Texas against Twin City Fire Insurance Company, a Hartford Company. Plaintiff alleges that it “has sustained and will sustain covered losses during the Covid-19 outbreak and subsequent Harris County Order” and that Hartford wrongfully denied Plaintiff’s claim for business interruption coverage.
- On March 27, Big Onion Tavern Group, LLC filed a complaint in the Northern District of Illinois against Society Insurance, Inc. (“Society”) alleging that Society wrongfully denied coverage for Plaintiffs’ business interruption losses related to the Closure Orders issued in Illinois. Plaintiffs seek declaratory judgment affirming that the losses they incurred in connection with the COVID-19 Closure Orders are insured losses under the policies.
- Also, on March 27, the law firm Coffey & McKenzie LLC brought suit for breach of contract in South Carolina state court against its insurer Twin City Fire Insurance Company. Plaintiffs allege that Hartford wrongfully declined to pay its business interruption insurance claim after the South Carolina Supreme Court issued an order suspending all court operations in South Carolina due to the COVID-19 virus.
Additional Workplace (Stay-at-Home) Issues
- Government Closure/Stay-at-Home orders have been released in multiple state and local jurisdictions. To date, states issuing these orders include Alaska, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Tennessee, Virginia, Washington, West Virginia, Wisconsin, and Vermont.
- For Government required stay-at-home orders have forced people to give significant focus on the use of electronic signatures and the maintenance of electronic records. This A&B advisory (3/27/20) reviews the three main laws that govern electronic signatures.
- For those asking how to define “federal crucial infrastructure sectors” the Department of Homeland Security’s Cyber Infrastructures division outlines (last update 3/28/20) 16 sectors and provides additional guidance for businesses.
- These orders challenge business to understand who is an “essential business” and other implications. To understand the business and legal implications, read this A&B advisory (3/18/20).
Cyber Security & Privacy
- Governments are increasingly seeking to leverage consumer geolocation data collected by industry as a tool to assist with fighting the spread of COVID-19. To see how the U.S. compares with the rest of the world, read this post on our Privacy and Security Blog (3/23/20).
- The Cybersecurity and Infrastructure Security Agency (CISA) released guidance (3/19/20) to help state and local jurisdictions and the private sector identify and manage their essential workforce while responding to COVID-19.
- The World Health Organization (WHO) provides daily “situation” reports.
- The Joint Commission on Accreditation for Healthcare Organizations (The Joint Commission) announced (3/17/20) it was suspending surveying in response to the coronavirus outbreak. The suspension is expected to last through April. For additional information visit the joint Commission Coronavirus website.
For background and the most up-to-date information, please visit the Centers for Disease Control and Prevention Coronavirus Disease 2019 website: HERE. The additional federal agency links are provided by the White House Coronavirus Task Force:
U.S. Department of Health and Human Services:
Centers for Disease Control and Prevention:
What you should know:
Information for Businesses:
Information for Travel and Transportation:
Information for Health Care Providers, First Responders, and Research Facilities:
Information for Families and Households:
Information for Schools and Childcare Providers:
Information for Community Events and Gatherings:
Information for Military Response:
Download PDF of the Flash Update