Regulatory and Legislative

Senate Vote Expected on Next Coronavirus Aid Package

FuturePlan ERISA Team September 09 2020

Senate GOP leadership has introduced, and is expected to hold a vote Thursday, on its next coronavirus (COVID-19) pandemic relief proposal. The Delivering Immediate Relief to America’s Families, Schools and Small Businesses Act (S. 178) is significantly narrower in scope than earlier proposals by the Senate and House of Representatives for the next round of COVID-19 aid to businesses and individuals. S. 178 would give states the option to continue providing up to $300 per week of federally-funded unemployment benefits, and provide liability relief to businesses, schools, healthcare facilities, and other entities whose workers may become ill from service there. S. 178 also includes the following provisions.

Retirement and Health

  • Creates another round of Paycheck Protection Program (PPP) small business loans, including receipt of a second PPP loan, for certain businesses that can demonstrate a qualifying degree of revenue loss; as before, the employee compensation element of PPP loans can be used for retirement or health benefit expenses
  • Simplifies the loan forgiveness element of some PPP loans—forgiveness being a key consideration for many business owner applicants—for eligible current and future borrowers

Education
S. 178 expands 529 plan qualified higher education expenses for homeschool and additional elementary and secondary expenses incurred after enactment, and before January 1, 2023. Parents of K-12 students at public, private, or religious schools would be allowed to use 529 plan funds for expenses such as the following.

  • Curriculum and curriculum materials
  • Books or other instructional material
  • Online materials
  • Certain licensed tutoring if the tutor or teacher meets certain requirements and only if the tutor is not related to the student
  • Fees for certain achievement tests, placement examinations, and admissions examinations
  • Fees for dual enrollment in an institution of higher education
  • Education therapies that are not provided by the school for students with disabilities or students who may need to deal with the current circumstances

S. 178 also allows parents who home-school to use 529 plan funds for educational expenses.

Senate passage is not a certainty and—realistically—this Senate bill is said to have little chance of passage in the House of Representatives. Still, proposals like this one may serve as starting points in a congressional negotiating process.

529 account COVID-19 Defined Contribution Plan Legislative updates SECURE Act

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