Testing Workers for Covid-19: Who Should Pay?

Summary

---

WSJ Your Money Briefing – August 7, 2020

Episode Summary: Testing Workers for Covid-19: Who Should Pay?

Main Theme

This episode explores the complex and contentious issue of who should bear the costs for Covid-19 testing in workplaces as businesses reopen. Host J.R. Whalen interviews Wall Street Journal healthcare reporter Sarah Kraus, examining legal responsibilities, insurance policies, and the mounting financial burden—especially on small businesses.

---

Key Discussion Points & Insights

Inconsistent Rules Across States

[01:29]

• Sarah Kraus: "Their rules are not consistent across states. Different states require that testing be covered for different types of workers, if at all."
• The federal government does not require insurers to cover routine, asymptomatic workplace testing. Coverage is mandated only if a worker has symptoms or has been exposed.
• States supplement federal guidance—some issue mandates (e.g., West Virginia covers workplace tests for childcare and nursing home workers without cost-sharing), while in others (e.g., California), employees might still bear some costs.

---

Economic Impact on Businesses

[02:09]

• Most companies, especially those that want to monitor workplace safety, are paying for tests themselves, impacting profits.
• Self-insured large companies pay all healthcare costs directly; for small businesses, these are new, significant expenses often not covered by their insurance.
• Real-world example: Mott Corp. in Connecticut spends over $30,000 a month testing 150 employees biweekly.
• Sarah Kraus: “That is coming out of their profits. So there is a push…to ask Congress to provide additional federal funding to help pay for workplace Covid testing.”

---

The Burden of Asymptomatic Transmission

[02:56]

• Covid-19’s asymptomatic spread forces frequent testing, which increases costs and complicates decision-making for employers.
• Sarah Kraus: “Companies…want to get ahead of the ball…get ahead of the problem, and it’s very expensive for us.”

---

The Insurer-Business Dynamic

[04:03]

• Businesses’ perspective: Pre-emptive testing is seen as a way to avoid outbreaks, productivity losses, and larger medical expenses later.
• Insurers’ perspective: They adhere to government-mandated responsibilities and are wary about the precedent and cost of routine testing.
• Quote: “They may not want to be in a situation where they are paying for weekly or bi-weekly testing of hundreds or thousands of employees if they don't have to, because they are also businesses managing their income and expenses.” – Sarah Kraus [04:21]

---

Insurance Mandates and Practices

[04:57]

• Most insurers follow federal/state mandates but have leeway to offer more—some cap coverage (e.g., only monthly tests).
• The pandemic has led to lower medical claims (with fewer doctor visits), increasing insurer profits, prompting companies to argue for more coverage.

---

Testing Logistics and Delays

[06:08]

• Diagnostic tests for active infection are being used, but result times have often stretched to 7-10 days, though improving.
• Industry is working to improve turnaround times, but delays complicate workplace safety planning.

---

Precedents from Other Types of Workplace Testing

[06:34]

• Routine workplace tests (like drug screening) are generally not insurance-covered—the cost falls on the employer.
• Some equate Covid testing to these, arguing insurers should not be responsible:
  “For a company that wants their workers to be screened for drugs…that's something that the company would have to pay for. It's not something that would typically be covered under their insurance plan.” – Sarah Kraus

---

Inconsistent Employer Practices

[07:01]

• Testing strategies remain in flux: some companies test weekly, others biweekly or monthly.
• Algorithms and risk profiles are used to determine frequency, considering job type, community case rates, and employee living conditions.

---

The Bottom Line: Cost Escalation

[07:52]

• The costs of regular testing keep mounting with no end in sight, raising questions about who should ultimately pay.
• Sarah Kraus: “It's no small cost. And that's why this is a contentious issue…if this is something that's going to be in place for a long time, those costs add up.”

---

Notable Quotes & Memorable Moments

• "Their rules are not consistent across states. Different states require that testing be covered for different types of workers, if at all."
  — Sarah Kraus, [01:29]

• “That is coming out of their profits.”
  — Sarah Kraus, referencing Mott Corp.’s $30,000/month testing expenses [02:59]

• "We’re trying to get ahead of the ball… get ahead of the problem, and it's very expensive for us."
  — Sarah Kraus, paraphrasing employers [02:56]

• "If everyone is getting tested every week, is that something that is financially viable for them?"
  — Sarah Kraus, on insurer reluctance [05:35]

---

Timestamps of Important Segments

• 01:29 — State vs. federal rules and coverage mandates
• 02:09–02:59 — Company-level and small business cost burdens, stories from the field
• 04:03–04:53 — Insurer and business push-pull
• 06:08 — Lab result delays and impact
• 06:34–06:56 — Precedent from other workplace testing (e.g., drug testing)

---

Summary & Takeaways

• No universal answer exists to “Who pays?” for Covid-19 workplace testing in the US—state laws, insurance policies, and employer strategies all vary.
• Small businesses shoulder a disproportionate share of costs, often with little insurance support.
• As testing is required for longer, the question of financial responsibility becomes increasingly urgent, with ongoing lobbying for federal assistance.
• The stakes are significant: effective workplace testing is crucial to pandemic control, but the expenses threaten business viability, especially for smaller firms.

---

Transcript

[A]

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day, but what policy changes should investors be watching? Washington Wise is an original podcast from Charles Schwab that unpacks the stories making news in Washington right now and how they may affect your finances and portfolio. [e-mail] WashingtonWise.

[B]

Here's your money briefing for Friday, August 7th. I'm J.R. whalen for the Wall Street Journal. For businesses, testing employees for the coronavirus is key to reopening safely and maintaining a healthy workplace. But it's also expensive. And many small businesses are finding that their insurance doesn't always cover the cost.

[A]

The companies that want to be able to do this are saying, we're trying to get ahead of the ball. We're trying to get ahead of the problem, and it's very expensive for us.

[B]

So who does the law say should be paying for these tests? We'll ask our healthcare reporter Sarah Krause after the break. The cost of testing employees for COVID 19 can run in the hundreds of thousands of dollars, but who should be footing the bill, insurance, the company or the employees themselves? Healthcare reporter Sarah Krause is here with us to discuss. So, Sarah, do all states have the same rules here, and how does that change? Who's responsible for paying?

[A]

Their rules are not consistent across states. Different states require that testing be covered for different types of workers, if at all. So in general, the federal government has said that insurers do not have to cover the cost of testing if it is as part of a broad sort of return to work type screening. If a person has symptoms, if they've had a known contact with someone who's sick, yes, insurers have to cover it. If it's just a regular sort of ongo check, they don't. And subsequent to that, states have issued their own guidance on whether, for example, nursing home worker testing should be reimbursed or child care worker testing.

[B]

How do large and small businesses deal with this?

[A]

In general, companies that wish to test their workers are paying for it out of their own pockets or profits. So many large companies are what's called self insured, meaning they pay for all of their health care costs. For smaller businesses, this is becoming an additional expense that they have to pay on the side because in general, regular workplace testing does not have to be covered by insurers and even within the state guidance. So, for example, like in West Virginia, insurers have to cover the cost of workplace testing for childcare or nursing home workers without Imposing any cost sharing, meaning the worker wouldn't have to pay a copay or meet a deductible. But in other states like California, the worker may have to pay a copay or pay to meet a deductible.

[B]

That's got to be a huge burden on small businesses.

[A]

It could. And this is something that small businesses have said is troubling them. I spoke for this story to a company in Connecticut called Mott Corp. That's paying more than $30,000 per month to test 150 employees every other week. And that is coming out of their profits. So there is a push among some human resources and other trade groups to ask Congress to provide additional federal funding to help pay for workplace COVID testing. And the reason all of this matters is one of the tricky things about COVID 19 is the potential for asymptomatic transmission, meaning you can be sick and infected and not know it and therefore go to work and potentially infect your colleagues. So the companies that want to be able to do this are saying, we're trying to get ahead of the ball. We're trying to get ahead of the problem, and it's very expensive for us.

[B]

Now, what's the push and pull between businesses and insurance companies regarding testing asymptomatic employees? You know, they've got to be tested also to ensure they don't become contagious down the line.

[A]

So from a company perspective, one of the arguments that executives have said to me is we're trying to get ahead of outbreaks. We don't want to be in a situation where a lot of our employees end up getting sick, which then ends up being a bigger healthcare cost down the road, a loss of productivity. We may need to shut down. On the insurer side, they often comply with what the federal or state governments say they are responsible for paying for. So they may not want to be in a situation where they are paying for weekly or bi weekly testing of hundreds or thousands of employees if they don't have to, because they are also businesses managing their income and expenses. So, you know, you're talking about this financial equation on both sides and trying to. Well, you're talking about this financial equation on both sides.

[B]

Now, are insurance companies mandated by law to reimburse for COVID 19 testing?

[A]

Well, many of them comply with what the federal or state guidance is, though they have the latitude to go beyond that. So if they're not required to COVID testing in a given state or for a given type of worker, they may go ahead and do it anyway. They May cover it just once a month and say once a month is where the buck stops. Or they may say, once a month is all we're prepared to pay for. So if you want to test the worker more than that, you'll have to pay for whatever goes beyond that regularity. So there's a pretty wide variety in terms of how insurance companies are treating this. And, you know, this is a time when, in general, people have gone to the doctor less. They insurers have. Have had pretty hefty profits. So it's sort of again, to that financial push pull. Right now, some companies are saying, hey, insurers are in a really strong financial situation. My workers are not going to the doctor. They're not using their insurance the way they normally would. So please cover these costs. However, to begin committing to paying for this long term on the insurance side could then, you know, sort of set a precedent for the future. If everyone is getting tested every week, is that something that is financially viable for them?

[B]

And what kind of tests are we talking about? Many people are waiting seven to ten days for results.

[A]

That's right. We are talking about the diagnostic test for COVID 19. So detecting an active infection, the turnaround times for those absolutely stretched in the last month, you know, in many cases beyond a week or even more. That is something that the big lab companies have said is getting better and that they're working to improve. But that certainly was the experience last month.

[B]

Do insurance companies typically pay for, you know, other kinds of tests at the workplace besides COVID 19?

[A]

No. So one of the things to note is, you know, for a company that wants their workers to be screened for drugs, you know, with a urine sample, that's something that the company would have to pay for. It's not something that would typically be covered under their insurance plan. So, you know, some folks are equating COVID test to that where, you know, workplace testing in general isn't typically covered by insurers. So why should this be?

[B]

You know, it seems like there is not a lot of consistency in terms of when to test and how to test.

[A]

Yes, Businesses are still in sort of experimentation mode on this. Some of them are testing workers weekly, some are testing biweekly, and some just once a month. It's sort of a moving target. Some of them are building algorithms to determine, you know, how often do I need to do it based on the type of job that a person is in, the prevalence of the disease in the community in which the business is located, the type of living environment or condition that their population of employees have because that can dictate the risk of transmission. So there's a lot of different inputs and variables that employers of all sizes are still working through to get the right balance.

[B]

Now, whoever pays for this or, you know, however the cost is divided up is just going to keep adding up and adding up and adding up because people have to be tested pretty regularly to ensure that you're catching potential positive cases. Right?

[A]

Right. It's no small cost. And that's why this is a contentious issue, is there is demand for testing. But if this is something that's going to be in place for a long time, those costs add up. So who should foot the bill for that?

[B]

All right. That's Wall Street Journal reporter Sarah Kraus. Sarah, thanks for coming on the show.

[A]

Thanks for having me.

[B]

And that's your Money briefing. I'm J.R. whalen for the Wall Street Journal.

[A]

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. [e-mail] WashingtonWise.