VSP Vision Care
| Company type | Private |
|---|---|
| Industry | Vision insurance |
| Founded | 1 September 1955 in Oakland, California, United States |
| Headquarters | Rancho Cordova , United States |
Area served | United States, Australia, Canada, Ireland, United Kingdom |
Key people | Michael Guyette (President and CEO), Michelle Skinner (Chief Provider & Industry Relations Officer) |
| Products | Vision insurance coverage, eyewear products, lenses and lens enhancements, ophthalmic technology, patient-provider services |
| Website | vsp |
Vision Service Plan, known in the market as VSP Vision Care, is a vision insurance provider headquartered in Rancho Cordova, California. Its operations span across the United States, Australia, Canada, Ireland, and the United Kingdom. Governed by optometrists, VSP’s business framework focuses on five primary segments: vision insurance coverage, eyewear products, lenses and lens enhancements, ophthalmic technology, and services aimed at strengthening patient-provider interactions. By 2017, the company had approximately 85 million members globally, establishing it as the leading vision insurance carrier in the United States.
The organization was established in September 1955 by optometrists in Oakland, California under the name California Vision Services. It transitioned from a nonprofit entity to a nationwide and eventually international company by 2007. In 2003, the Internal Revenue Service rescinded VSP’s tax-exempt designation due to its selective membership criteria and executive compensation practices.
Among its top leadership are Michael Guyette serving as President and CEO, along with Michelle Skinner as Chief Provider & Industry Relations Officer. VSP’s portfolio includes subsidiaries such as Marchon Eyewear, Office Mate, Altair Eyewear, and Visionworks. In 2017 alone, the company produced 19 million frames and maintained a presence through more than 34,000 locations worldwide.
VSP’s strategic edge stems from its vertically integrated business model that merges insurance offerings with eyewear manufacturing and technology services. This synergy supports ongoing growth and enhances its share within the vision care marketplace.
Canada
VSP entered the Canadian market toward the end of 2007, initially providing services exclusively to Canadian employees of American companies. By 2012, coverage extended to roughly 2,000 Canadians. The following year, VSP Vision Care Canada formed a partnership with FYidoctors—a private optometry group comprising over 400 optometrists across 212 sites—to deliver vision insurance solutions to employers throughout Canada.
United Kingdom and Ireland
In 2013, VSP launched operations in the UK and Ireland under the brand VSP Neighbourhood Eyecare, adopting a strategy similar to its expansions in Australia and Canada. Collaborations were established with organizations including the Association of Optometrists (AOP), National Eyecare Group (NEG), Generali U.K., and Thomsons Online Benefits to support employee benefit initiatives.
Acquisitions
In July 2008, VSP acquired Ultra Lens laboratory based in Ft. Lauderdale and entered into a partnership with Perfect Optics located in California.
The following month, August 2008, VSP completed the acquisition of Marchon Eyewear Inc., headquartered in Melville, New York, for $735 million through a combination of cash and debt financing after obtaining regulatory clearance. Marchon became a fully owned subsidiary while continuing operations independently from its New York office. This deal also incorporated Altair Eyewear (a division of VSP), Allure Eyewear, and OfficeMate Software Solutions. Marchon is responsible for producing and distributing branded eyewear lines including Calvin Klein Collection, Columbia Sportswear, Converse, Donna Karan, Lacoste, Nike, Salvatore Ferragamo, Victoria Beckham, among others.
In 2019, VSP further broadened its retail presence by acquiring Visionworks, one of the largest optical retail chains in the United States.
Non-profit status
As early as 1999, the Internal Revenue Service (IRS) began examining VSP's status as a non-profit organization. According to a report in Optometric Management, by 2002, VSP had generated $1.86 billion in revenue and provided eyecare coverage to approximately one out of every eight Americans. While VSP highlighted increasing payments to practitioners and introduced initiatives aimed at enhancing optometrists' profit margins, numerous optometrists experienced reduced margins alongside increased administrative burdens, prompting some to contemplate discontinuing their affiliation with VSP. Issues were also raised regarding management decisions made without consulting the optometrist community.
In 2005, a federal district court in Sacramento, California determined that VSP did not sufficiently demonstrate that it was organized for social welfare purposes under section 501(c)(4). The court observed that VSP functioned similarly to a for-profit corporation, with executive compensation linked to net earnings and benefits accruing primarily to members rather than the general public, resulting in the denial of its tax-exempt status.
Later that same year, VSP petitioned for recognition as a 501(c)(4) social welfare entity and sought refunds for taxes paid in 2003. The government filed a motion for summary judgment opposing this request. In December 2005, Judge Lawrence Karlton ruled against VSP, acknowledging its charitable activities but concluding that promoting social welfare was not its principal objective as required under federal tax exemption criteria.