I had ran into same issue with multiple users and have the fix for the issue
Step 1. uninstall the device in device manager while selecting to remove the driver
Do this until it shows the Microsoft driver shows (Microsoft Usbccid Smartcard Reader.
--- I had to remove the device twice as there are two separate drivers.
Once you have the Microsoft driver you have to set permissions on a registry entry.
HKLM:\SOFTWARE\Microsoft\Cryptography\Calais
You have to give "Local Service" full control over that Calais key
Reboot the PC and you should be good to go. I have fixed 10+ machines this way so far.
Here is a script (I didnt not write it) that does the registry fix for you
Start Powershell ISE as admin and run the following
$acl = Get-Acl HKLM:\SOFTWARE\Microsoft\Cryptography\Calais
$rule = New-Object System.Security.AccessControl.RegistryAccessRule ("local service","FullControl",@("ObjectInherit","ContainerInherit"),"None","Allow")
$acl.SetAccessRule($rule)
$acl |Set-Acl -Path HKLM:\SOFTWARE\Microsoft\Cryptography\Calais