Ernst Helps Allow More Iowa Hospitals to Benefit from Paycheck Protection Program

WASHINGTON—After calling for action, U.S. Senator Joni Ernst (R-IA) has helped secure a fix that ensures publicly-owned hospitals with 500 or fewer employees – like many rural, county-owned hospitals throughout Iowa – are eligible for the relief provided through the Paycheck Protection Program (PPP).

“Iowa’s public hospitals have continued to provide critical services to protect the health and safety of our local communities across the state during this crisis. Just like small businesses, they are also experiencing significant financial losses and are in need of relief – which is why I worked across the aisle to ensure they were included in the popular Paycheck Protection Program,” said Senator Ernst. “With access to these important loans, Iowa’s public hospitals will be able to pay their bills and our health care workers – the heroes of this pandemic – as we work to defeat COVID-19.”

This updated guidance from the Small Business Administration (SBA) comes after Ernst and a bipartisan group of her colleagues requested the change as well as her support for a bipartisan proposal, the Rural Health Relief Act, which would provide relief to rural hospitals amid the COVID-19 pandemic by ensuring their eligibility for the PPP.

Since the outbreak of COVID-19, Ernst has spoken with hospitals, health centers, and health care workers in Iowa about their needs and concerns, and she successfully helped include critical funding for the health care community in both the bipartisan CARES Act and the recently passed, and now law, Phase 3.5 relief package.

Ernst has also urged the Department of Health and Human Services (HHS) to immediately assist rural hospitals and clinics by prioritizing funding for these critical health care providers.

Earlier today, Ernst announced she had helped secure over $383 million for Iowa’s rural hospitals, clinics, and community health centers.

Background:

On April 24, Treasury and SBA announced that 501(c)(3) hospitals are eligible for the Paycheck Protection Program if they receive less than 50% of its funding from state or local government sources, exclusive of Medicaid. Last night, they provided additional guidance clarifying that hospitals exempt from taxes under section 115 can also qualify as long as the hospital “reasonably determines, in a written record maintained by the hospital, that it is an organization described in section 501(c)(3) of the Internal Revenue Code and is therefore within a category of organization that is exempt from taxation under section 501(a).”

###