New Yorkers are not only dealing with the crippling effects of COVID-19 but are now also faced with the most significant changes made to the Medicaid program in years. Governor Cuomo’s 2020-21 State Budget proposed a $2.5 billion cut to New York State’s Medicaid program and there was much speculation as to where the savings to the program would come from. Now the Governor’s budget has passed and here are the big changes you should know:
- Look-back period for Community based Medicaid. Previously, someone seeking home care or other community-based Medicaid services could apply almost immediately after transferring assets out of his or her name. Starting on October 1, 2020, applicants for home care will face a 30-month look back period (2.5 years). This means that transfers of assets made by a Medicaid applicant and/or spouse within 30 months prior to the date of application can result in a penalty period, that is a period in which Medicaid will not pay for the applicants home care services.
- Raised requirements for eligibility for Personal Care Services (“PCS”) and the Consumer Directed Personal Assistance Program (“CDPAP”). PCS and CDPAP programs both provide home health care services, such as home health care aides, in the community. The CDPAP program allows consumers to recruit, hire, and direct their own chosen home care workers. PCS provides caregivers through licensed agencies. The new criteria raise the bar for who can qualify for these services.
a) Under the new guidelines, a Medicaid recipient must require assistance with at least three (3) activities of daily living (ADLs). ADLs include activities such as, dressing, bathing, eating, personal hygiene, transferring, toileting and continence. Adding these requirements will reduce the ability of many to qualify for PCS and CDPAP services. Fortunately, those with a diagnosis of Dementia or Alzheimer’s can qualify for services needing assistance with only one (1) ADL.
b) Medicaid is also eliminating Level 1 personal care, which provides assistance to disabled individuals with such chores as shopping, laundry and meal preparation. These services are frequently required by elderly and disabled individuals in order to live safely in the community.
These changes take effect on October 1, 2020. It is clear to us that the intent of these changes is to limit the availability of these crucial programs. However, as in the past, we will continue to assist our disabled and elderly clients protect their resources and secure available care.
With these changes in mind, it is more important than ever to be proactive about your estate and asset preservation planning. Planning ahead can eliminate the stress and financial burden imposed by these new changes. We at CBMS urge those who have not yet completed or started their estate and asset preservation planning to do so without delay. We are here to answer any questions or concerns you may have. Give us a call at (516) 931-8100.
Disclaimer: The information in this article is continuously changing and being updated. This article is for informational purposes only and does not constitute legal or business advice. In no way is Capell Barnett Matalon & Schoenfeld LLP advising that it is appropriate for all entities to undertake these measures. If you require assistance, please contact Stuart Schoenfeld, Esq. at email@example.com or Monica Ruela, Esq. at firstname.lastname@example.org.
Resources for Religious Organizations, Foundations, Charities, and Other Non-Profit Organizations Related to Coronavirus (COVID-19)
The novel Coronavirus (COVID-19) has spread to countries worldwide. We have curated a collection of resources that may be helpful for Boards and management of religious organizations, foundations, charities, and other non-profit organizations in navigating this crisis. We will update this page as developments warrant.
The Paycheck Protection Program (“PPP”) through the U.S. Small Business Administration offers loans to small businesses and non-profit organizations, among other types of entities, of up to $10 million. For more information, including about the PPP’s applicability to non-profit organizations, please see CBMS’s article.
Economic Injury Disaster Loans and Loan Advances are being provided to small businesses and private non-profit organizations by the U.S. Small Business Administration. These loans are low-interest fixed rate loans of up to $2 million and loan advances of up to $10,000 that can be used to pay immediate expenses during this emergency. For more information, please see CBMS’s guidance here.
Private Sector Relief Funds:
Facebook Small Business Grants Program is distributing $100 million in cash grants and ad credits to help small businesses weather the storm created by COVID-19. Small businesses or organizations with between 2 and 50 employees that have been operating for more than a year, have experienced challenges from COVID-19, and operate in one of the five boroughs of New York City are eligible to apply.
Citi and the Citi Foundation have committed $10 million to help Community Development Financial Institutions in the US serve small businesses who may not fully qualify for federal government stimulus funding.
Community Foundation Relief Funds for Non-Profits (NY): Service-providing non-profit organizations may be able to obtain grants and/or loans to assist in providing services to frontline workers and/or vulnerable populations. Check out the following resources:
The New York Community Trust: This fund will give grants and loans to NYC-based nonprofits that are providing aid to those struggling with fallout from COVID-19. Priority will be given to nonprofits addressing essential healthcare and food insecurity as well as arts and culture. Funds will help nonprofits with a variety of needs, including protective equipment, cleaning supplies, technological assistance, and support for financial losses.
NYC COVID-19 Response & Impact Fund: This fund is providing no-interest loans ranging from $100,000.00 to $3,000,000.00 to New York City nonprofit organizations working in the human services, with particular interest in those supporting essential healthcare, food delivery, homeless services, workforce development, educational support, and early childhood education, and arts and culture. The application through the Nonprofit Finance Fund can be found here.
Brooklyn COVID-19 Response Fund: This fund is providing grants to frontline advocacy and service organizations in Brooklyn that are providing aid to vulnerable populations, meal delivery, and daily living needs for homebound neighbors, support for low-wage workers, and limited access to healthcare and paid leave.
Neighborhoods First Fund: This fund makes grants to support community-led organizations and coalitions that engage local residents, workers, businesses, institutions, and government in creating, enacting, and implementing policies and plans that shape New York City and its neighborhoods. To inquire about a grant, fill out the form here.
Robin Hood has established a COVID-19 relief fund for organizations at the frontline of relief efforts including serving vulnerable populations, emergency assistance, at risk for govt contracts, incurred unexpected expenses.
COVID-19 Long Island Philanthropic Response Fund by the Long Island Community Foundation is providing grants to aid nonprofit organizations in Long Island providing services for those affected by COVID-19.
National Council on Aging COVID-19 Community Response Fund is providing grants to qualified local nonprofit organizations that are meeting needs of older populations.
Delta Dental Foundation is providing unrestricted grants for organizations in New York State helping vulnerable populations affected by COVID-19 in the form of medical services and/or services for home-bound seniors. See here for the grant application and guidelines.
General Non-Profit Resources:
Workplace guidance from CDC (updated regularly).
Many tech companies have made products for remote work free during this period. See this roundup.
Here is guidance on changing a physical event to a virtual event.
New York Council of Nonprofits, Inc. is hosting calls and pertinent topic webinars on a weekly basis to assist non-profits with COVID-19 updates. See the full calendar here.
Resources for Foundations:
Council on Foundations has a resource center for foundations.
Resources for Churches & Religious Organizations:
The CDC has a resource page for community and faith-based leaders.
Georgetown University’s Berkley Center for Religion, Peace, & World Affairs has a resource guide for faith-based organizations.
The Mother Cabrini Health Foundation provides grants to nonprofit organizations serving low-income individuals, families and communities in New York. All grantees must adhere to and comply with the ethical principles, tenets, and teachings of the Roman Catholic Faith, including but not limited to the Ethical and Religious Directives for Catholic Health Care Services published by the United States Conference of Catholic Bishops. Applicant organizations are not required, however, to be affiliated with the Catholic Church to be eligible for grants.
Resources for Charitable Organizations Providing Direct Relief Assistance:
The IRS has guidance on documentation a charity providing disaster relief assistance must maintain to document its relief activities.
The information provide in this resource list is continuously changing and being updated. This list is for informational purposes only and does not constitute legal or business advice. If your business or organization requires assistance, please contact Renato Matos, Esq., at Rmatos@cbmslaw.com.
In response to the 2020 Coronavirus pandemic, President Trump signed into law, a $2.2 trillion economic stimulus program called the Coronavirus Aid, Relief, and Economic Security Act (“Cares Act”). The Cares Act is designed to distribute money quickly to provide immediate financial relief to qualified individuals, small businesses, and other organizations. One of the most far-reaching sections of the Cares Act is the Paycheck Protection Program (“PPP”) which expands the economic relief the Small Business Administration (“SBA”) can offer and creates incentives to retain and pay employees during these uncertain and stressful times.
The Cares Act’s PPP commits $349 billion for – potentially forgivable – loans, by expanding loans provided by the SBA under Section 7(a) of the Small Business Act. PPP expands the recipients eligible for federally-backed loans, by including certain non-profit organizations as a qualified business. Small businesses, non-profit organizations, sole proprietorships, self-employed individuals, and independent contractors that meet the criteria and requirements of the program can apply for a loan through PPP. Specifically, a qualified non-profit organization is any entity: (a) exempt from federal income taxes undereither Section 501(c)(3) and 501(c)(19) (veteran organizations) of the Internal Revenue Code (“Code”), and (b) with fewer than 500 employees, including individuals employed on a full-time, part-time , or other basis . This article will solely focus on how PPP applies to non-profit organizations exempt from taxes under 501(c)(3) of the Code with fewer than 500 employees (“Non-profit Organization”), including certain religious and charitable organizations.
The SBA will guarantee 100% of the loans issued by qualified banks, credit unions and other lenders previously authorized to issue loans under Section 7(a) of the SBA or recently designated by the Treasury Department. Through the PPP, eligible recipients can receive a loan up to $10 million with a fixed interestrate of 0.5%. The loan amount is determined based on the Non-profit Organization’s payroll (as such term is defined below) and will be the lesser of: (a) 2.5 times the average monthly payroll costs incurred during the one year period before the date on which the loan is made (seasonal businesses and companies not in existence from February 15, 2019 to June 30, 2019, are treated differently), and (b) $10 million. The repayment of the loan (principal and interest) will be deferred for six (6) months, however, interest will continue to accrue over this period. No personal guarantee is required, no collateral is needed to be pledged to secure the loan, no administration fee will be charged (although participating lenders may charge a fee) and there will be no prepayment penalties. In addition, the loan is nonrecourse (the lender has no claim against any member of a Non-profit Organization for non-payment), except if the proceeds are used for prohibited or illegal uses.
A PPP loan must be used for the following expenses:
(a) payroll costs,
(b) interest on mortgage obligations (not including prepayment or the payment of principal) or other debt obligations existing prior to February 15, 2020,
(c) rent under an enforceable lease agreement executed prior to February 15, 2020, and
(d) utility payments for which services began prior to February 15, 2020 (collectively, “Eligible Operation Expenses”).
Specifically, “payroll” includes salaries, wages, commission, payroll support (paid vacation, sick, medical and family leave), group healthcare benefits (including insurance premiums), retirement benefits and the payment of state or local employment taxes. However, payroll expenses exclude: (a) salaries for individual employees in excess of $100,000 annually, (b) payroll taxes, railroad retirement taxes, and income taxes, (c) compensation for employees with a foreign principal residence, and (d) qualified wages for which a credit is permissible under another federal program (sick or family leave programs).
A Non-profit Organization can apply for a loan through PPP from any existing SBA lender, federally insured depository institution, federally insured credit union, Farm Credit System institution or from additional lenders authorized by the Department of Treasury, by submitting a loan application and the required supplemental documents. In evaluating a potential borrower, the lending institution will only consider whether the Non-profit Organization: (a) was in operation on March 1, 2020 and (b) paid salaries and payroll taxes during that time. An eligible Non-profit Organization must make a good faith certification to the lending institution stating that: (i) the requested loan is necessary to support operations during the adverse economic conditions resulting from the COVID-19 pandemic, (ii) the funds will be used to retain employees and maintain payroll and (iii) the Non-profit Organization has not and will not receive another loan through the PPP (only one loan is permitted) between February 15, 2020 and December 31, 2020.
If a Non-profit Organization receives a loan through PPP, it is eligible for forgiveness (cancellation) of the indebtedness based on the amount spent on the Eligible Operation Expenses. Due to the high demand, it is anticipated that the SBA will require that 75% of the forgiven indebtedness be used for payroll over the eight (8) week period commencing upon receipt of the loan (“Eight Week Period”). Forgiveness of the loan is not automatic. The Non-profit Organization will need to submit a loan forgiveness application to the servicing lender. The lender must make a decision on the forgiveness of the loan within sixty (60) days from receipt of the forgiveness application.
The loan may be forgiven up to the principal amount, but the forgiven amount may be reduced if: (a) the Non-profit Organization decreases the number of employees during the Eight Week Period. The loan forgiveness reduction is based on the following equation:
The average number of full-time employees per month for the Eight Week Period
The average number of full-time employees per month from February 15, 2019 to
June 30, 2019 or January 1, 2020 to February 29, 2020 (as such time period is
elected by the Non-profit Organization).
(b) there is a reduction in eligible employee compensation in excess of 25% of such compensation paid during the most recent full quarter period prior to origination of the loan, (c) any of the proceeds of the loan are not used for the Eligible Operation Expenses (in accordance with the required proportions), or (d) the Non-profit Organization does not provide the lender with adequate records evidencing the use of the funds; thus, it is crucial for Non-profit Organizations to keep track of the funds. It is important to note that if a Nonprofit Organization restores the reduction in employees and/or compensation by June 30, 2020, the forgiven indebtedness will not be decreased pursuant to (a) and (b) above.
Any portion of the loan that is not forgiven is subject to a two year maturity date and will continue to operate in accordance with the loan terms agreed upon by the Non-profit Organization and the lender. Last, the Cares Act provides that the forgiven debt under the PPP is excluded from gross income for purposes of the Code of 1986. Therefore, unlike other cancelled debt, the Non-profit Organization will not be required to pay income tax on the forgiven debt.
Non-profit Organizations and small businesses can apply for the SBA loans starting April 3, 2020, and independent contractors and self-employed individuals can apply starting April 10, 2020. The PPP will continue until June 30, 2020, however Non-profit Organizations should apply as soon as funds become available because there will likely be a high volume of applicants and there is a finite amount of funds allocated to the program.
Below are a few key resources to assist Non-Profit Organizations through the application process:
- Fact Sheet: https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
- Sample Application: https://home.treasury.gov/system/files/136/Paycheck-ProtectionProgram-Application-3-30-2020-v3.pdf
- 100 Most Active SBA 7(a) Lenders: https://www.sba.gov/article/2020/mar/02/100-mostactive-sba-7a-lenders
Disclaimer: The information in this article is continuously changing and being updated. This article is for informational purposes only and does not constitute legal or business advice. Each entity, based on its specific circumstances, must determine whether to seek and secure an SBA loan. In no way is Capell Barnett Matalon & Schoenfeld LLP advising that it is appropriate for all entities to seek such loans. If your religious corporation or non-profit organizations requires assistance, please contact Jodi Warren, Esq., at Jwarren@cbmslaw.com or Renato Matos, Esq., at Rmatos@cbmslaw.com.
On March 27, 2020, a $2.2 trillion economic stimulus program called the Coronavirus Aid, Relief, and Economic Security Act (as known as the “CARES Act”), was signed into law, in response to the 2020 coronavirus pandemic. The CARES Act includes provisions that are designed to provide immediate relief to, among others, certain non-profit organizations. One (1) area of note in the CARES Act, includes the expansion of section 7(a) of the Small Business Act (15 U.S.C. 636(a)) (the “Act”), known as the Paycheck Protection Program.
PAYCHECK PROTECTION PROGRAM
Under the CARES Act, the Paycheck Protection Program (“PPP”) provides for $349 billion of forgivable Small Business Administration (“SBA”) loans to qualifying businesses. One such qualifying business eligible for SBA loans are non-profit organizations that (a) are tax exempt under Section 501(c)(3) or Section 501(c)(19) of the U.S. Internal Revenue Code and (b) have less than 500 employees. This would include certain religious and charitable corporations.
Through the PPP, eligible non-profits can receive a loan of up to $10 million with an interest rate not to exceed 4%. The exact loan amount will be determined by a formula directly correlated to the payroll costs (i.e. up to 2.5 times the borrower’s average monthly, less certain excluded payroll costs). No personal guarantee is required, and no collateral needs to be pledged to secure the loan. The SBA will guarantee 100% of the loan and eligible borrowers can apply through their existing SBA lenders, qualified banks, credit unions and other lenders. Lenders will begin processing loan applications as soon as April 3, 2020.
The CARES Act also provides for grant forgiveness of the loans up to an amount equal to the following expenses paid during an eight-week period beginning on the date of the origination of the loan:
1. Payroll costs (subject to certain salary cap and other limitations);
2. Interest on mortgage obligations or other debt existing prior to Feb. 15, 2020;
3. Rent under any enforceable lease agreement prior to Feb. 15, 2020; and
4. Utilities for which service began prior to Feb. 15, 2020.
It is important to note that there are the restrictions on the amount of loan forgiveness that may be received by borrowers, including that the forgiven amount: (a) cannot exceed the loan principal and (b) will be reduced if employees are either laid off or there is a reduction in compensation during such eight-week period. However, if those employees are rehired or if their compensation is restored to the February 15, 2020 levels prior to June 30, 2020, then the forgiveness reduction penalties will not impact the business or entity.
The application can be found here, along with a fact sheet for borrowers here, provided by the U.S. Department of the Treasury. Additional information regarding the mechanics and requirements of the PPP will be released in the coming weeks.
Governor Cuomo recently announced his proposed State Budget for 2020-21 and it is making the many of us working with the elderly or disabled very nervous. The proposed budget states that $2.5 billion must be cut from the Medicaid program. Although the proposed budget does not specify which aspects of the Medicaid program will be cut, it does set up a Medicaid Redesign Team (“MRT”) designed to consider the aspects of the Medicaid program that should be changed or eliminated. These recommendations are expected to come out in mid-March.
Although no one knows for sure what these recommendations will be, we have some good guesses as to what is on the chopping block. The first item under the microscope is the Consumer Directed Personal Assistance Program (“CDPAP”). The CDPAP program allows consumers to recruit, hire, and direct their own home care workers, rather than using caregivers from agencies. In many cases, the most appropriate and suitable care can best be provided by a relative or other chosen caregiver rather than an agency.
The second item is the Spousal Refusal. The Spousal Refusal is utilized by many couples applying for long-term care benefits for an ailing spouse – either at home or in a facility. This essential eligibility strategy ensures that the “well” spouse can protect needed resources and income to pay living expenses. The elimination of this strategy would be devastating to many throughout the state as it would mean that both spouses would need to be impoverished to get on the program.
Various NYS bar associations are advocating for these needed programs. We at CBMS continue to vigilantly watch the changes to the Medicaid program and we urge our friends, colleagues and clients to be proactive about their own Medicaid planning. We are always here to address any questions and concerns.
CBMS is proud to announce that associate attorney David de Barros has been promoted to Partner, effective as of Jan 1, 2020.
CBMS Partner Robert Barnett recently presented a lecture through Lorman discussing how to utilize passive activity losses including recent tax legislation and cases.
With so many new tax rules, it is important to be informed before the upcoming tax season Lorman has graciously offered this 93-minute lecture to our friends and colleagues at a 50% courtesy discount. The course is eligible for 1.5 CPE credits in Connecticut, New Jersey and 9 other states.
Click the link below if you would like to access it as either an OnDemand Webinar, an audio file and reference manual delivered on USB flashdrive, or MP3 download of the webinar along with reference manual.
CBMS is pleased to report the success of our 5th annual Interchurch Center Conference. This year, titled ‘”Reenvisioning Mission and Ministry: Creative Strategies for the Church of Tomorrow” had amazing speeches from all of our speakers, beginning with our Keynote address: How We Gather’s Casper ter Kuile. Casper is the co-founder of Sacred Design Lab, a research and design consultancy working to create a culture of belonging and becoming. His engaging speech gave audience members opportunities to reflect and converse with each other, but also to ask thought-provoking questions and learn about the parallels of gathering in different circumstances.
Bill Woolsey, founder of the FiveTwo Network, and Melissa Spas, Director of Education and Engagement of the Lake Institute on Philanthropy and Giving, rounded out the rest of the speakers with their own respective talks on Christianity’s place in leadership, and the ways beyond monetarily that we can contribute philanthropically.
The conference was wrapped up with two panels, first a diverse panel of pastors from various backgrounds and denominations speaking of their various experiences as leaders of the faith in New York. The Reverends Cleotha Robertson, Andrew Durbidge, William Critzman, and Lenny Duncan delivered touching anecdotes about the different struggles that come with leading a congregation, being LGBT, not having enough money to renovate appropriately, and more. Ultimately their different backgrounds demonstrate the individual perspectives that they bring to the table in order to solve the problems that they all face.
Finally, the Council of Church Advisors, a not-for-profit group that was a main sponsor for the Conference held a panel with its members discussing how to spearhead solutions from different professional avenues. They are a diverse group of individuals from different professions that have joined together to help address and fix the ailments presented to most modern congregations, and from a multi-faceted approach work with leaders of said congregations.
We hope all who attended enjoyed themselves and took something valuable away from the conference. Here’s to another successful conference next year!
CBMS Attorney Secures Plea Deal that Removes Pro Bono Client from Tennessee’s Death Row After 18 Years
Capell Barnett Matalon & Schoenfeld LLP attorney Elizabeth Cate recently successfully negotiated a favorable plea agreement for a CBMS pro bono client who was facing the death penalty for the second time on capital murder charges in Memphis, Tennessee. As the ABA Death Penalty Project noted “a term-of-years plea deal for a reduced charge on a remand capital case is extremely rare.” Ms. Cate and her co-counsel also uncovered new evidence that will provide the client, Andrew Thomas, with a basis to challenge his federal convictions and life sentence on charges stemming from the same 1997 armed robbery for which he faced charges in Tennessee state court.
Under the plea agreement, reached on the morning that opening arguments in Mr. Thomas’s re-trial were scheduled to begin, Mr. Thomas entered an “Alford plea” to one charge of Murder in the Second Degree and in return, the Shelby County District Attorney’s Office agreed to a sentence of 25 years. An “Alford plea” is a guilty plea under which the defendant does not admit that he is guilty of the crime charged, but admits that, if he went to trial, the evidence presented by the prosecution would likely result in his conviction. Under local rules, Mr. Thomas will receive credit for the 22 years he has already served in custody, making him eligible for release from state custody within the next three years.
Ms. Cate began working on Mr. Thomas’s federal and state habeas corpus petitions in 2013 while at her prior firm, which acquired the case through a referral from the ABA Death Penalty Project. In 2017, she and her team successfully vacated Mr. Thomas’s state conviction and death sentence for felony murder charges in the Sixth Circuit Court of Appeals. A panel of the Sixth Circuit found that Mr. Thomas’s conviction and death sentence should be reversed because the state prosecutor had a duty to disclose to Mr. Thomas’s trial counsel a $750 payment that law enforcement made to Mr. Thomas’s ex-wife after her testimony against him at his 1998 federal trial on armed robbery and weapons possession charges relating to the 1997 armed robbery. Mr. Thomas’s ex-wife also testified at his state trial for capital murder charges three years later stemming from the delayed death of the armored car guard shot during the robbery. Mr. Thomas’s lawyers in both of his trials were never told about the payment. The Sixth Circuit found that “the prosecutor had a duty to disclose this payment rather than allow the witness to commit perjury by denying its existence” and that failing to disclose this evidence was “particularly egregious.”
A re-trial in Shelby County criminal court was scheduled for July 2019. Ms. Cate, along with appointed Memphis counsel Claiborne Ferguson and Mike Working, were prepared to challenge the state’s claims that he shot the guard in the robbery and that the guard’s eventual death over two years after the shooting was a direct result of the gunshot wound inflicted during the robbery. After four days of jury selection, and extensive negotiations with the Shelby County DA’s Office, the prosecutor agreed to the deal that Ms. Cate and local counsel proposed – an Alford plea to Murder in the Second Degree with a 25-year sentence.
Partner Joseph Milano, representing the Metropolitan New York Synod of the Evangelical Lutheran Church in America (“Synod”), defended the Synod in a case against Eltingville Lutheran Church (“Eltingville”), one of their nearly 200 interdependent member churches. After a nearly two year ecclesiastic process, the Synod Council determined that Eltingville could no longer fulfill the purposes for which it was formed and took charge and control of Eltingville’s property pursuant to Church doctrine and polity and New York law. Eltingville sought to have the New York State Supreme Court nullify the decision of the Synod Council and prohibit the Synod from imposing synodical administration at Eltingville. The Synod moved to dismiss Eltingville’s complaint, arguing that the Supreme Court lacked jurisdiction over this internal church dispute because the decision of the Synod Council was a nonjusticiable religious dispute. The Supreme Court granted the Synod’s motion. Eltingville appealed to the Appellate Division, Second Department, which affirmed the decision of the lower court, stating that the “First Amendment forbids civil courts from interfering in . . . religious disputes” and that by “uniting with a denominational body, a local congregation consents to be bound by the ecclesiastical determinations of the denominational government, subject only to such appeals as” that denomination itself provides.
Mr. Milano represents many denominations and has successfully litigated numerous cases related to governance of religious organizations.
A link to the full article below: