Appeal or New Claim? Seventh Circuit Says Disability Onset Change Requires Fresh Filing

In Moratz v. Reliance Standard Life Ins. Co., No. 24-2825, —F.4th—-, 2025 WL 2505760 (7th Cir. Sept. 2, 2025), the Seventh Circuit confronted a dispute over whether an employee could alter the fundamental basis of her disability claim during the ERISA appeals process. The court held that when a claimant provides facts on appeal that directly contradict her initial application—specifically, changing the onset date of her disability—that constitutes a new claim for benefits rather than a correction. Because the claimant had not exhausted administrative remedies with respect to that new claim, the court affirmed judgment for the insurer.

The case arose out of the COVID-19 pandemic. Karen Moratz, principal flutist for the Indianapolis Symphony Orchestra (“ISO”), was furloughed in March 2020 when the orchestra shut down operations. In December 2020, she developed symptoms consistent with COVID-19 and later struggled with dizziness, tinnitus, and cognitive issues that made it impossible to perform. When the ISO rehired its musicians in September 2021, Moratz attempted to return but was quickly placed on sick leave due to her ongoing symptoms. She applied for long-term disability (“LTD”) benefits in February 2022 under the Reliance Standard policy sponsored by the ISO.

On her application, however, Moratz reported that her last day worked was in March 2020, and that her disability onset date was December 11, 2020. Reliance denied her claim on the ground that she was not an “active, full-time employee” when her disability began. The policy’s eligibility provision required claimants to be actively employed at the time disability commenced, and while Reliance had temporarily extended coverage for furloughed employees for 90 days during the pandemic, that extension had expired in June 2020. On the face of her application, therefore, Moratz did not meet the plan’s eligibility requirements.

On appeal, Moratz submitted additional evidence through counsel, including declarations from ISO officials confirming that she had been rehired on September 1, 2021. She argued that her return to work established her as an eligible, full-time employee and that her symptoms prevented her from performing the essential duties of her occupation after that date. Reliance nevertheless affirmed its denial, concluding that the September 2021 information represented a fundamentally new claim that could not be resolved through the appeal of the original application. The company invited her to file a fresh LTD claim based on the September 2021 date, but she instead brought suit in federal court under ERISA § 502(a)(1)(B).

The district court granted summary judgment for Reliance, and the Seventh Circuit affirmed. Applying de novo review—because Reliance had not issued a timely decision on the appeal—the panel stressed that the plaintiff bore the burden of showing entitlement to benefits under the plan. The court began by reviewing the Reliance policy, which tied eligibility to an employee’s status as an “active, full-time employee.” Since Moratz admitted that she was furloughed in December 2020, she was not eligible under the plan at that time. That meant her initial claim, seeking benefits for a disability that began in December 2020, was properly denied.

The court then turned to the more difficult question: whether ERISA regulations required Reliance to treat the September 2021 evidence as part of the same claim. ERISA mandates that plan administrators consider additional information submitted on appeal, but the Seventh Circuit emphasized that this requirement extends only to information that supplements or clarifies the original claim. Here, the panel reasoned, Moratz’s new evidence did not merely correct minor errors or fill in gaps; it contradicted her initial application. In her first filing, she stated she had not worked since March 2020, and both she and the ISO confirmed that date. On appeal, however, she argued that she had resumed work in September 2021. The court described this as “a complete 180” that transformed the nature of the claim.

The panel drew a distinction between additional facts that “shed light” on the same asserted loss and contradictory facts that define an entirely different loss. In her initial claim, Moratz sought benefits for an inability to work beginning in December 2020. On appeal, she sought benefits for an inability to work beginning in September 2021. Because each onset date defined a different “loss” under the policy, the court held that the latter was a new claim requiring a new administrative filing. Allowing claimants to reverse course on appeal, the court warned, would undermine the orderly operation of ERISA’s claims procedures, which are designed to give plan fiduciaries—not courts—the first opportunity to evaluate claims.

The court also underscored the importance of the exhaustion requirement in ERISA cases. Claimants must pursue administrative remedies before turning to federal court, and exceptions exist only when exhaustion would be futile or when meaningful review is unavailable. Moratz did not argue that filing a new application would have been futile, and the record provided no basis to excuse her failure to exhaust. Because she had not submitted a new LTD application based on her September 2021 onset date, the court could not adjudicate that claim.

Ultimately, the Seventh Circuit affirmed the district court’s ruling in favor of Reliance. While acknowledging the seriousness of Moratz’s health problems and her long tenure as a professional musician, the panel held that her appeal presented a new claim that had never been administratively exhausted. Under ERISA’s framework, that procedural failure barred judicial relief. Judgment affirmed.