Vision insurance company likely to shut down after rehabilitation efforts fail

WEST VALLEY CITY  — In a rare move, a Utah vision insurance company’s operations were taken over by the state’s insurance commissioner. Now, the insurance commissioner says it’s time for the company to shut down.

For about a month now, Opticare Vision Services has been in “Rehabilitation.” That means, under court order, all its business decisions have been in the control of Utah Insurance Commissioner Jon Pike and his deputies.

The goal of rehabilitation is to help the company regain financial stability and avoid liquidation. But now the state says that’s not possible, writing in a letter to those insured with Opticare that the company “is unable to pay its debts” and should be liquidated.

Get Gephardt broke the news in early October that Opticare’s sister company, Standard Optical, abruptly shut its doors leaving many Utahns unable to collect the eyeglasses or contact lenses for which they had already paid.

Later that month, Get Gephardt reported that Standard Optical’s closure was permanent.

Stephen Schubach ran both companies. In early October, Schubach told Get Gephardt that Opticare was doing well, financially, even as Standard Optical shuttered.

“We’re operating our Opticare Vision Services, which is in good shape and is working, as a vision network,” Schubach said.

State officials don’t agree. As of this week, the state is asking the court for permission to terminate the rehabilitation efforts and liquidate Opticare.

For anyone who has vision coverage through Opticare, pending court approval, those vision coverage policies will end at the end of December.

The latest move seemed to catch Schubach off guard. In a text message Thursday he wrote, “I have been told nothing about this.”

After Get Gephardt looped him in on the liquidation efforts, Schubach responded, “[The Insurance Commissioner and his deputies] have refused any communication with me so I’m at a loss as to what to think. I talk to them and send emails but get no response. I have many good things occurring for Opticare that I share with the insurance department but never hear back.”

Schubach said that the rehabilitator fired Opticare’s chief financial officer and an accountant without saying why.

Schubach says that he’s asked to meet with the rehabilitator and has “not received an answer.”

“As a shareholder and officer I have been kept in the dark purposely and according to Utah State Law. I was led to believe this would be a collaborative venture. It has been anything but that,” he wrote.

In response, Commissioner Pike told Get Gephardt by email, “On October 18, 2024, Stephen Schubach, as Chair of the Board of Directors of Opticare of Utah, inc., gave written consent to the Utah Insurance Commissioner to place the company into court-ordered rehabilitation.”

Pike added, “Under the court’s rehabilitation order, the rehabilitator ‘has authority to do all acts necessary or appropriate to accomplish the rehabilitation of Opticare.’ Company officers no longer have authority to operate the company.”