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Essential Businesses during COVID-19: Identification and Operation FAQs

During the COVID-19 pandemic, the ability to classify your business as “essential” could be the key to its survival. Almost every state in the United States has imposed a “stay-at-home” or “shelter-in-place” order that restricts the types of businesses that can remain open. In fact, as of the writing of this alert, there are only seven states that have not imposed state-wide restrictions on which businesses can stay open during the Coronavirus pandemic and even those states have individual cities and counties that have imposed stricter orders. However, these orders are not always clear, and interpretation is often left to the individual business. This alert will answer some of the most common questions about essential businesses.

Q: When did all of this “essential business” business start and how long will it last?

California was the first state to issue a stay-at-home order on March 19, 2020. Since then, governors all over the country have been telling businesses to close and people to stay home whenever possible to stem the spread of COVID-19. For example, Ohio’s Stay at Home Order took effect on March 23, 2020 while South Carolina’s Order was not put in place until April 7, 2020.

Each governor has also set their own time frame for lifting stay-at-home orders. Consequently, there are end dates spanning from April 15 to June 10. Individual orders aside, the climbing number of confirmed cases and deaths makes it clear that removing orders will not be a quick process. Even if states do work together to reopen businesses, expect reopening to be a very gradual process led by the states.

Q: What is an essential business anyway?

Every state, and even some counties and cities, have different definitions of what makes a business “Essential”. However, there are some commonalities. For example, a citation to the U.S. Department of Homeland Security, Cybersecurity & Infrastructure Security Agency’s (CISA) updated Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response is almost universal. If your business fits into one of the 17 categories listed in CISA Memorandum, then you are likely an essential business. Some examples of essential businesses include:

  • Supermarkets and grocery stores
  • Pharmacies
  • Garbage collection
  • Healthcare operations
  • Hardware stores
  • Gas stations and auto-repair shops
  • Banks
  • Post offices and shipping businesses
  • Veterinary clinics and pet stores
  • Farmers' markets and food banks
  • Educational institutions, for the purposes of facilitating distance learning
  • Agriculture and food processing
  • Warehousing, storage, and distribution
  • Transportation, including airlines, taxis, rideshare programs, and vehicle rentals
  • Businesses that allow other essential businesses to operate

In contrast, these are examples of businesses largely agreed to be nonessential:

  • Theaters
  • Gyms and recreation centers
  • Salons and spas
  • Casinos and racetracks
  • Shopping malls
  • Sporting and concert venues
  • Daycares (open in some states, e.g. Florida allows childcare centers to remain open for employees working at essential businesses or operations and Ohio has established temporary pandemic childcare center licenses)

Orders from many states are fairly open-ended and definitions of essential businesses are subject to interpretation. In Ohio, for example, Lt. Governor Husted has asked businesses to use their common sense to decide whether they are essential. However, consider the Hobby Lobby scenario when deciding if your business is essential. Hobby Lobby argued that they provided fabric for mask-making and educational supplies and were, therefore, an essential business. Employees and other Ohio citizens took issue with this classification and brought it to the attention of the government. Not only did Hobby Lobby suffer a hit to their public image, they were also forced to close all stores after receiving a cease and desist letter from the Attorney General. 

Q: Okay, I think I’m an essential business, can I operate like normal?

Even if you are considered an essential business, you may not be able to operate normally. In almost all states, essential businesses are required to follow social distancing requirements established by the CDC, including:

  • Promoting remote work as much as possible;
  • Maintaining six-foot social distancing for both employees and members of the public at all times;
  • Requiring employees to wash hands with soap and water for at least twenty seconds as frequently as possible or use hand sanitizer, covering coughs or sneezes (into the sleeve or elbow, not hands);
  • Providing protective equipment (masks and gloves) to employees;
  • Regularly cleaning and disinfecting high-touch surfaces;
  • Adopting policies to prevent workers from entering the premises if they display COVID-19-like symptoms.

One point of contention between states is whether an essential business can maintain all operations or only those operations that make them essential. This answer will depend on the wording of your state’s order. For example, in Ohio and Florida, as long as your essential business is practicing proper safety protocols to protect workers, all aspects of a business could remain open. However, Michigan’s Order requires “restricting the number of workers present on premises to no more than is strictly necessary to perform the business’s or operation’s critical infrastructure functions” so the business would be able to maintain only operations that are directly essential.

For more information, contact Ashley Watson at abwatson@bmdllc.com or 614.7518, or any member of the BMD L+E team.

Investment Training for the Second and Third Generations

Consider this scenario. Mom and Dad started the business from the ground up. Over the decades it has expanded into a money-making machine. They are able to sell the business and it results in a multimillion-dollar payday for their labors. The excess money has allowed Mom and Dad to invest with various financial advising firms, several fund management groups, and directly with new startups and joint ventures. Their experience has made them savvy investors, with a detailed understanding of how much to invest, when, and where. They cannot justify formation of a full family office with dedicated investors to manage the funds, but Mom and Dad have set up a trust fund for the children to allow these investments to continue to grow over the years. Eventually, Mom and Dad pass. Their children enjoy the fruits of their labors, and, by the time the grandchildren are adults, Mom and Dad's savvy investments are gone.

Provider Relief Funds – Continued Confusion Regarding Reporting Requirements and Lost Revenues

In Fall 2020, HHS issued multiple rounds of guidance and FAQs regarding the reporting requirements for the Provider Relief Funds, the most recently published notice being November 2, 2020 and December 11, 2020. Specifically, the reporting portal for the use of the funds in 2020 was scheduled to open on January 15, 2021. Although there was much speculation as to whether this would occur. And, as of the date of this article, the portal was not opened.

Ohio S.B. 310 Loosens Practice Barrier for Advanced Practice Providers

S.B. 310, signed by Ohio Governor DeWine and effective from December 29, 2020 until May 1, 2021, provides flexibility regarding the regulatorily mandated supervision and collaboration agreements for physician assistants, certified nurse-midwives, clinical nurse specialists and certified nurse practitioners working in a hospital or other health care facility. Originally drafted as a bill to distribute federal COVID funding to local subdivisions, the healthcare related provisions were added to help relieve some of the stresses hospitals and other healthcare facilities are facing during the COVID-19 pandemic.

HHS Issues Opinion Regarding Illegal Attempts by Drug Manufacturers to Deny 340B Discounts under Contract Pharmacy Arrangements

The federal 340B discount drug program is a safety net for many federally qualified health centers, disproportionate share hospitals, and other covered entities. This program allows these providers to obtain discount pricing on drugs which in turn allows the providers to better serve their patient populations and provide their patients with access to vital health care services. Over the years, the 340B program has undergone intense scrutiny, particularly by drug manufacturers who are required by federal law to provide the discounted pricing.

S.B. 263 Protects 340B Covered Entities from Predatory Practices in Ohio

Just before the end of calendar year 2020 and at the end of its two-year legislative session, the Ohio General Assembly passed Senate Bill 263, which prohibits insurance companies and pharmacy benefit managers (“PBMs”) from imposing on 340B Covered Entities discriminatory pricing and other contract terms. This is a win for safety net providers and the people they serve, as 340B savings are crucial to their ability to provide high quality, affordable programs and services to patients.