Oct. 31--Vision Service Plan isn't going anywhere. In fact, a favorable decision by a state agency Tuesday prompted the Rancho Cordova insurer to green-light a plan to add 400 jobs in the area.

The state agreed to rewrite the rules governing California's fledgling online insurance market, a crucial piece of President Barack Obama's overhaul of the health care system.

The revision gives companies like VSP -- which insure eye care only -- much greater access to sell coverage in the online market. VSP and other eye-care insurers can now take aim at the full range of Californians who will buy coverage through the market, which begins operations in January 2014.

The agency overseeing the new market, the California Health Benefit Exchange, said in August that stand-alone vision insurers could sell coverage to small businesses but not individuals -- the biggest slice of the market. As many as 2.4 million uninsured Californians are expected to buy coverage through the exchange, which will be called California Covered.

VSP, which employs 2,100 Sacramentans, hinted it might leave the state. A slew of government and business leaders, led by Senate President Pro Tem Darrell Steinberg, D-Sacramento, urged the agency to change its mind.

The agency's governing board reversed course Tuesday, voting 5-0 to let VSP and its peers become full participants in the market.

Within minutes, VSP Chief Executive Rob Lynch told The Bee the company will hire 400 workers in the region. The hirings had been deferred until the controversy was settled.

"We'll take the hold off the jobs," Lynch said. The hiring includes 250 new workers at VSP's optical lens-grinding facility near Highway 50.

Lynch added that the company wasn't actually contemplating leaving the state. But if the exchange hadn't changed its mind, he said VSP would have taken "a serious look" at directing all future expansions to other states.

Ohio, Texas and New York, where VSP has operations, have been courting the company, he said.

Several of VSP's supporters argued that the exchange's original decision made little business sense because many Californians buy vision coverage from stand-alone companies like VSP.

"We think this is good for consumers," the exchange's executive director, Peter Lee, said in urging the board to reverse course.

The board's original decision was tied to the federal tax subsidies being offered to individuals who buy through the exchange.

Letting individuals buy vision insurance from one company -- and the rest of their insurance from another company -- would require splitting the subsidies between the policies. The exchange board originally said that was too complicated.

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Call The Bee'sDale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

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