Impact on Individuals
Most U.S. residents earning less than $75,000 will receive a $1,200 one-time cash payment from the federal government. Married couples earning less than $150,000 will receive a $2,400 cash payment. Families will receive a one-time cash payment of $500 per child. For individuals earning more than $75,000, the payment will be reduced by $5 for every $100 of income that exceeds the limits. Individuals earning $99,000 or more and couples earning $198,000 or more will receive no payment.
Payments are based on either 2018 or 2019 tax filings. Citizens who do not file a tax return and receive Social Security benefits are also eligible for the cash payments.
Student Loan Relief
The CARES Act includes a provision that suspends through Sept. 2, 2020, payments for individuals who have direct loans or Federal Family Education Loans (FFEL) held by the federal government. Loans held by commercial lenders or individuals receiving federal Perkins loans are not eligible for suspended payments. It is important to note that suspended payments are not being paid by the federal government. The repayment term for any suspended loans will be extended for the duration of the suspension period.
Interest will not accrue while loans are suspended, and any payments suspended during this period will continue to count towards Public Service Loan Forgiveness payments and income-driven repayment plans. Suspended payments will be reported to credit bureaus as on-time payments. Involuntary collections on direct loans and FFEL loans are also suspended.
Healthcare and COVID-19 Testing
The CARES Act expands insurance coverage for COVID-19 testing to not only FDA-approved COVID-19 testing, but also for testing that is pending FDA approval. Private insurance plans must cover the cost of testing without deductibles, copayments, or coinsurance. The act also includes insurance coverage for some services and vaccines intended to help prevent or mitigate COVID-19. Individuals insured by Medicare Part B can receive COVID-19 testing at no cost. Uninsured individuals may receive free COVID-19 testing under any state Medicaid program that elects to offer this option.
Medicare prescription drug plans and Medicare Advantage Part D plans are required to allow up to a 90-day supply of prescription drugs while the COVID-19 emergency is in effect.