There is no love lost between the seamstresses and the Harvard-and-Princeton-educated David Corbin. Six former employees told the Sunday Gazette-Mail that in the mid-1990s, Corbin assembled several hundred employees at the Huntington plant "and he stood up there and told us we were dumb, ignorant hillbilly women who were lucky to have a job, and he could move the plant to Mexico at the snap of his fingers," said Juanita Johnson. The other five women said she reported his remarks accurately.
David Corbin grew up in Huntington. In the early 1990s, he filed a lawsuit against his father, Howard Corbin, over management issues in the family business, which once employed at least 1,000 people at its Huntington and Cannonsburg, Ky., plants. Former employees speak affectionately of the elder Corbin, who set up a scholarship fund for children of company employees and started the company's first health-care plan.
"It's good he's not here to see all this," Johnson said.
David Corbin did not answer a written request for an interview. His phone is unlisted.
In February 2002 — seven months after Corbin Ltd. stopped paying most bills — David Corbin posted a notice to his employees that "our health-care costs have skyrocketed. This is not what we agreed to and the company can no longer fund the skyrocketing costs." Three months later, he shut the insurance plan down.
After the plan shut down, Corbin sent letters to medical providers promising that Corbin Ltd. would pay, asking them to stop contacting employees. Then in November, Corbin asked employees to approve a bare-bones plan in which they lost vacation time, but the company promised to pay the bills within three years.
"We knew by then that Corbin Ltd. wasn't going to be there in three years. [The new plan] only covered people who worked regular, and by that time, very few of us were," Maynor said. They voted it down unanimously.
While the employee bills were not being paid, "Corbin continued to pay himself $400,000 a year and his stepmother $300,000 a year," said seamstress attorney Richards.
In November, Corbin sold his Greenwich, Conn., home — advertised for $4 million — and moved to Williamsburg, Va. Sheriff's departments in Connecticut and Virginia tried unsuccessfully to serve him with a notice that his former employees are suing him.
"There's no law or rule that says self-funded plans must pay debts within a set period of time," said UNITE's Hess. "David Corbin would pay $60 on $60,000 and say he would eventually pay the rest, and, under federal law, as long as a company says it's going to pay, there's no way to bring them to arbitration or impose a timeline for payment.
"I don't fault companies for wanting to do self-funded insurance, because the cost of insurance in the United States is astronomical, and soon, the working poor won't be able to have it at all," she said. "But if this situation shows anything, it shows that these plans need to be regulated."
Why is Acordia being sued, too?
"I blame Acordia as much as David Corbin," said seamstress Nancy Lewis, who was left with $27,000 in bills, according to the audit. "They knew he hadn't paid the bills for months, but they didn't tell us." Lewis sewed pocket seams for most of her 23 years with Corbin. She pays 16 providers $5 a month, she said, "trying to save my credit rating."
In their answer to the seamstresses' lawsuit, Acordia denies that it had any legal obligation to tell them the company was not paying its share. Acordia lawyers also said Acordia "did not participate in, conceal or fail to take steps to remedy any breaches of fiduciary duty" by Corbin Ltd.
Acordia kept pre-certifying employees for surgeries, tests and other medical expenses for 15 months after Corbin stopped paying most of the bills.
The seamstresses' lawsuit alleges that, "When it approved such treatments and procedures, Acordia knew the plan and Corbin might not be able to pay any medical bills related to such procedures, and that the individual participants might become liable for such bills." In their answer to the lawsuit, Acordia denies it.
By March 2002, hospitals were suing Corbin Ltd. employees for the company's share of the bills. "If they had just said in 2001 that, 'Hey, we're sorry, but Corbin can't pay anymore,' we wouldn't have liked it, but a lot of us could have avoided these bills," with secondary insurance and other means, Maynor said.
The Corbin Ltd. plan worked smoothly for the first four years, both company and union agree. Health-care costs were rising steeply, but Corbin Ltd. was laying off employees, so costs stayed relatively even.
Employees paid their co-pays at the doctors' offices and hospitals. Corbin deducted spouse premiums from their paychecks. Claims were sent to Acordia National to process. Acordia pre-certified procedures and told Corbin how much the company owed each payment period. After Corbin transferred the money to Acordia, Acordia sent checks to medical providers.
Then Corbin stopped paying most of the bills. Acordia did not signal the employees.
Acordia had always sent each employee an Explanation-of-Benefit sheet (EOB) for each medical bill. "When I got my EOB, I assumed the bill was paid," Johnson said.
After Corbin stopped paying, "Acordia would send us an EOB that looked like it was paid," Maynor said. Those EOBs listed the amount the company had not paid in a column labeled "Paid." Under "Patient responsibility," the EOB listed the amount the employee would have owed if the company had paid its part. (See accompanying explanation of bill.)
"This went on for at least six months, Maynor said. "And someone — I don't remember who — came to me and said their doctor said the bills weren't being paid, so I called Acordia and asked them, and the Acordia woman agreed, no, they weren't being paid. And I had the hardest time explaining that to the others. Nobody wanted to think they would do that."
Acordia stopped processing claims for Corbin in September 2002, 15 months after the problems began. "That's what I don't understand, why they waited so long," said Charles Dunn, state Insurance Commission consumer advocate.
"It's my understanding that most claims administrators won't stay around for much longer than two months if the claims aren't being paid," said attorney Richards.
That question will be asked in court. Judy Thomas, Acordia's chief counsel, said, "It is often in the best interest of the employee participants not to throw up our hands and abandon a client if we are being assured that payments will be forthcoming and that there is just an unusual circumstance that is holding something up." Beyond that, she said, Acordia would not comment.
Richards has given the seamstresses a letter they can show medical providers. It asks hospitals and doctors to suspend their lawsuits and collection activities until the seamstresses' lawsuit plays out. Some have done so.
"If [the lawsuit is] successful, the money will go into a big pot, administered by the court, and it will be divided among the medical providers who are owed money," Richards said.
"I'm afraid to think what will happen if we don't win," Bias said.
To contact staff writer Kate Long, use e-mail or call 348-1798.
Monday in The Charleston Gazette: Wynona Maynor: "Ordinary person," extraordinary effort.