Vision Service Plan (VSP), a 58-million-member benefit plan worth around $3.7 billion, is threatening to move its Sacramento headquarters out of state if California doesn’t retool the Health Benefit Exchange it’s rolling out next year as part of President Obama’s Affordable Care Act.

The company is leveraging its 2,100-employee presence in the state’s capital to influence how the exchange will treat stand-alone vision care plans when the health care act takes effect in 2014. VSP has 14 million customers in California.

When Californians sign up with the exchange for health care subsidized by the federal government, consumers with small-business group plans will have the option of buying VSP coverage, but individuals will not. The state made the decision, at least for the first year, in part because of technical difficulties in sorting out who would get the government subsidies.

Although the not-for-profit company made its mark servicing groups of consumers through their employers, the company ventured out into the individual-plan insurance market in 2007. California’s decision could affect a chunk of that business in the state.

Inclusion in the state’s plan would give it more exposure to the buying public, although it wouldn’t necessarily affect the price of its product.

Moving its headquarters to another state would not impact its business in California, but it would be a blow to a state battling against a reputation of being over-regulated and anti-business. A year ago, CEO Rob Lynch told the Sacramento Bee that VSP was being “heavily recruited” by other states, but that his company wasn’t going anywhere.

Lynch said then that California’s anti-business reputation was more perception than reality and that the state “could do a better job of PR.” But the decision last month by the exchange might have influenced that perception, or perhaps it is simply an affair of the heart. “Maybe it's time for us to choose to go where we are wanted,” Lynch wrote in a  Sacramento Business Journal op-ed last month.

State Senate Pro Tem Darrell Steinberg has asked the exchange to reconsider its decision and Executive Director Peter Lee said  it might be reviewed next month.

–Ken Broder

To Learn More:

Rancho Cordova's VSP Threatens to Leave State over Health Insurance Decision (by Dale Kasler, Sacramento Bee)

VSP Threats for Government Pie Work (by Kevin Knauss, InsureMeKevin blog)

VSP Rejects Offers to Relocate (by Darrell Smith, Sacramento Bee)