diff --git a/python_files/tests/pytestadapter/test_coverage.py b/python_files/tests/pytestadapter/test_coverage.py
index 5dd8a0323b24..d4e3669e2733 100644
--- a/python_files/tests/pytestadapter/test_coverage.py
+++ b/python_files/tests/pytestadapter/test_coverage.py
@@ -4,6 +4,8 @@
 import pathlib
 import sys
 
+import pytest
+
 script_dir = pathlib.Path(__file__).parent.parent
 sys.path.append(os.fspath(script_dir))
 
@@ -42,3 +44,47 @@ def test_simple_pytest_coverage():
     assert focal_function_coverage.get("lines_missed") is not None
     assert set(focal_function_coverage.get("lines_covered")) == {4, 5, 7, 9, 10, 11, 12, 13, 14, 17}
     assert set(focal_function_coverage.get("lines_missed")) == {18, 19, 6}
+
+
+coverage_file_path = TEST_DATA_PATH / "coverage_gen" / "coverage.json"
+
+
+@pytest.fixture
+def cleanup_coverage_file():
+    # delete the coverage file if it exists as part of test cleanup
+    yield
+    if os.path.exists(coverage_file_path):  # noqa: PTH110
+        os.remove(coverage_file_path)  # noqa: PTH107
+
+
+def test_coverage_gen_report(cleanup_coverage_file):  # noqa: ARG001
+    """
+    Test coverage payload is correct for simple pytest example. Output of coverage run is below.
+
+    Name              Stmts   Miss Branch BrPart  Cover
+    ---------------------------------------------------
+    __init__.py           0      0      0      0   100%
+    reverse.py           13      3      8      2    76%
+    test_reverse.py      11      0      0      0   100%
+    ---------------------------------------------------
+    TOTAL                24      3      8      2    84%
+
+    """
+    args = ["--cov-report=json"]
+    env_add = {"COVERAGE_ENABLED": "True"}
+    cov_folder_path = TEST_DATA_PATH / "coverage_gen"
+    actual = runner_with_cwd_env(args, cov_folder_path, env_add)
+    assert actual
+    coverage = actual[-1]
+    assert coverage
+    results = coverage["result"]
+    assert results
+    assert len(results) == 3
+    focal_function_coverage = results.get(os.fspath(TEST_DATA_PATH / "coverage_gen" / "reverse.py"))
+    assert focal_function_coverage
+    assert focal_function_coverage.get("lines_covered") is not None
+    assert focal_function_coverage.get("lines_missed") is not None
+    assert set(focal_function_coverage.get("lines_covered")) == {4, 5, 7, 9, 10, 11, 12, 13, 14, 17}
+    assert set(focal_function_coverage.get("lines_missed")) == {18, 19, 6}
+    # assert that the coverage file was created at the right path
+    assert os.path.exists(coverage_file_path)  # noqa: PTH110
diff --git a/python_files/vscode_pytest/run_pytest_script.py b/python_files/vscode_pytest/run_pytest_script.py
index 61a77c51a156..1abfb8b27004 100644
--- a/python_files/vscode_pytest/run_pytest_script.py
+++ b/python_files/vscode_pytest/run_pytest_script.py
@@ -41,7 +41,9 @@ def run_pytest(args):
     if is_coverage_run == "True":
         # If coverage is enabled, check if the coverage plugin is already in the args, if so keep user args.
         for arg in args:
-            if "--cov" in arg:
+            # if '--cov' is an arg or if '--cov=' is in an arg (check to see if this arg is set to not override user intent)
+            if arg == "--cov" or "--cov=" in arg:
+                print("coverage already enabled with specific args")
                 coverage_enabled = True
                 break
         if not coverage_enabled: