COVID-19 Pandemic

9 Months Ended

Sep. 30, 2021

Unusual or Infrequent Items, or Both [Abstract]

COVID-19 Pandemic

COVID-19 PANDEMIC

The United States broadly continues to experience the pandemic caused by COVID-19, which significantly disrupted the nation’s economy, the senior living industry, and the Company’s business. The COVID-19 pandemic caused a decline in the occupancy levels at the Company’s communities, which has negatively impacted the Company’s revenues and operating results, which depend significantly on such occupancy levels.  In an effort to protect its residents and employees and slow the spread of COVID-19 and in response to quarantines, shelter-in-place orders and other limitations imposed by federal, state and local governments, the Company had previously restricted or limited access to its communities, including limitations on in-person prospective resident tours and, in certain cases, new resident admissions. As of September 30, 2021, all of the Company's senior living communities were open for new resident move-ins. Although vaccines are now widely available, we cannot predict the duration of the pandemic or its ongoing impact on our business. If the COVID-19 pandemic worsens, including the risk of transmission of highly contagious variants of the COVID-19 virus, the Company may have to impose or revert to restricted or limited access to its communities.

The outbreak of COVID-19 has required the Company to incur significant additional operating costs and expenses in order to implement enhanced infection control protocols and otherwise care for its residents, including increased costs and expenses relating to supplies and personal protective equipment, testing of the Company’s residents and employees, labor and specialized disinfecting and cleaning services, which has increased the costs of caring for the residents and resulted in reduced occupancy at such communities. During the three and nine months ended September 30, 2021 the Company incurred $0.4 million and $1.7 million, respectively, in direct costs related to the COVID-19 pandemic and during the three and nine months ended September 30, 2020 the Company incurred $1.4 million and $4.6 million, respectively, in costs related to the COVID-19 pandemic.

In November 2020 and January 2021, the Company accepted $8.1 million and $8.7 million, respectively, of cash for grants from the Public Health and Social Services Emergency Fund’s (the “Provider Relief Fund”) Phase 2 and 3 General Distribution, which was expanded by the Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act") to provide grants or other funding mechanisms to eligible healthcare providers for healthcare related expenses or lost revenues attributable to COVID-19. The $8.7 million Phase 3 Provider Relief Funds were recorded as other income in the nine months ended September 30, 2021. The CARES Act Phase 2 and Phase 3 funds are grants that do not have to be repaid, provided the Company satisfies the terms and conditions of the CARES Act. In addition, the Company had received approximately $1.9 million in relief from state agencies in the year ended December 31, 2020. The Company has also applied for additional grants pursuant to the Provider Relief Fund’s Phase 4 General Distribution, for which the U.S. Department of Health and Human Services (“HHS”) allocated up to $25.5 billion to provide additional funding to certain healthcare providers, including assisted living operators. Additional funding is available for providers operating in rural communities.

The Company has elected to utilize the CARES Act payroll tax deferral program to delay payment of a portion of its payroll taxes incurred from April 2020 through December 2020. One-half of the deferral amount will become due on each of December 31, 2021 and December 31, 2022. At September 30, 2021, the Company had $7.4 million in deferred payroll taxes, of which, $3.7 million is included in accrued expenses, and the remaining $3.7 million is included in other long-term liabilities in the Company’s Consolidated Balance Sheets.