Filing for Long Term Disability (LTD) benefits can be a difficult process, especially when you are grappling with a health condition. The forms are complex, the deadlines are strict, and insurance companies are known for scrutinizing every detail. A recent decision from the U.S. Court of Appeals for the Seventh Circuit, Moratz v. Reliance Standard Life Insurance Company, provides a critical lesson for anyone applying for disability benefits under an ERISA-governed plan: accuracy and consistency are not just important—they are paramount. A fundamental inconsistency in an application can be the difference between receiving the benefits you deserve and having your claim thrown out on a procedural technicality. This case serves as an example of the pitfalls of the ERISA claims process and highlights how an experienced ERISA attorney can help claimants navigate the system.
At The Garner Firm, our Philadelphia-based ERISA and long-term disability attorneys have seen firsthand how insurance giants like Reliance Standard leverage minor errors to deny legitimate claims. Understanding the court’s reasoning in Moratz can empower you to avoid similar mistakes and build a stronger case from the beginning.
Why is this case important for ERISA claimants? It demonstrates the critical importance of getting expert legal guidance from the very start of your disability claim process. At The Garner Firm, we have seen firsthand how insurance giants like Reliance Standard leverage minor errors to deny legitimate claims. Understanding the court’s reasoning in Moratz can empower you to avoid similar mistakes and build a stronger case from the beginning.
A Musician’s Career Derailed by COVID-19
The case centered on Karen Moratz, a world-class musician who served as the principal flutist for the Indianapolis Symphony Orchestra (“ISO”) for decades. Like many, her career was disrupted by the COVID-19 pandemic. In March 2020, the ISO furloughed its musicians, including Ms. Moratz. In December of that year, while still on furlough, she contracted COVID-19 and developed long-haul symptoms, including dizziness and tinnitus that made it impossible for her to perform her duties as a professional musician.
In February 2022, Ms. Moratz applied for long-term disability benefits through the policy her employer had with Reliance Standard Life Insurance Company. On her application, she stated that her last day of work was March 13, 2020, and the date she first became unable to work due to her disability was December 11, 2020.
Reliance Standard denied her claim in less than a week. The reasoning was straightforward: according to the policy, a person was only eligible for coverage if they were an “active, Full-time employee”. Because Ms. Moratz was on furlough and not actively working in December 2020 when she claimed her disability began, Reliance determined she was not eligible for benefits under the terms of the LTD plan.
The Appeal That Became a “New Claim”
This initial denial is a tactic used by LTD insurers. However, the critical part of this story happened during the appeal. In August 2022, Ms. Moratz, now with legal counsel, appealed Reliance’s decision. In her appeal, she presented a new piece of information: the ISO had actually re-hired her and other musicians in September 2021. She had attempted to return to work, but her symptoms of dizziness and tinnitus made it impossible to practice and perform with the full symphony. Consequently, the ISO placed her on sick leave on September 15, 2021.
With this new information, her argument changed. She was no longer claiming her disability began in December 2020 while she was on furlough. Instead, she was now asserting that she was an active, full-time employee as of September 1, 2021, and that her disability began on September 15, 2021, when she was forced to take sick leave.
Reliance Standard’s response to this appeal was simple. In January 2023, it affirmed its denial. The company stated that because her initial claim was for a disability beginning in December 2020, it was correctly denied. As for the new information about her September 2021 employment and disability onset, Reliance advised her that this constituted a “new LTD claim” and that she was free to “file a new” application based on that later date. Instead of doing so, Ms. Moratz filed a lawsuit under ERISA.
The Seventh Circuit’s Ruling: Why a “Complete 180” Sinks an ERISA Appeal
The legal battle hinged on one question: Was the information Ms. Moratz submitted on appeal a simple correction to her initial claim, or was it a fundamentally new claim for benefits? The Seventh Circuit Court of Appeals sided with Reliance Standard, and its reasoning is a lesson for all LTD applicants.
The court explained that under the policy, a “claim” is a request for payment for a particular “loss”—in this case, the inability to work. Ms. Moratz’s initial application was for a loss that began in December 2020. The information she provided on appeal, however, was for a separate loss that began in September 2021. Her employment status and the facts surrounding her inability to work were entirely different on these two dates.
While ERISA regulations require an insurer to consider all information submitted by a claimant during an appeal, the court drew a line between adding new, supportive facts and presenting contrary facts. The court stated that Ms. Moratz was not merely correcting a scrivener’s error; she was trying to “do a complete 180 and change the date she claimed she was last able to work”. The court found that her first application was “inconsistent” with the facts presented in her appeal. It concluded: “No claims processing system can work if an applicant can submit information that is not just new or complementary but completely inconsistent with previous facts”.
Because the appeal effectively presented a new claim for a disability beginning in September 2021, Ms. Moratz was required to follow the proper procedure: file that new claim with Reliance and exhaust the administrative process before going to court. Her failure to do so was fatal to her lawsuit.
Key Takeaways for Your Long-Term Disability Claim
The Moratz decision offers several takeaways for anyone preparing to file an LTD claim, particularly with an insurer like Reliance Standard.
- Precision is Everything: Dates, job descriptions, and medical information must be accurate. As this case shows, the “last day worked” and “date of disability” are not formalities; they are the part of basis for your claim. An error on these key dates can give the insurer a reason to deny your claim.
- An Appeal is Not a “Do-Over”: The purpose of an administrative appeal is to argue that the insurer’s initial decision was wrong based on the evidence. You can and should submit additional medical records or statements that support your original claim. However, you may not be able fundamentally change the nature of the claim itself by alleging a different set of core facts, such as a different disability onset date that falls under different employment circumstances.
- Recognize When to File a New Claim: If your circumstances change after your initial application—for example, if you attempt to return to work and are unsuccessful—the correct path may not be to appeal a previously denied claim. As Reliance Standard itself pointed out, the proper course of action may be to file a brand-new claim based on the new disability onset date. This resets the process but ensures you are exhausting your administrative remedies for the correct “loss.” An experienced ERISA attorney can help you navigate this process and determine which is the best approach for your situation.
How The Garner Firm Can Protect Your Rights
The procedural aspects of ERISA can be difficult to navigate alone. The Moratz case is an example of how an unrepresented claimant can make an error at the application stage, which even subsequent legal counsel cannot fully undo. Insurance companies like Reliance Standard have teams of experts looking for any inconsistency to justify a denial.
At The Garner Firm, our experienced ERISA and long-term disability attorneys understand these tactics. We help our clients from the beginning, ensuring their applications are accurate, complete, and strategically sound. We can help you:
- Review Your Policy: We analyze your LTD policy to understand its specific definitions, requirements, and exclusions before you file.
- Frame Your Claim Correctly: We work with you and your doctors to establish an accurate and supported disability onset date that aligns with your medical evidence and employment history.
- Manage the Process: We handle all communications with the insurance company, manage deadlines, and build a comprehensive administrative record designed to win at the appeal stage or, if necessary, in court.
If you are preparing to file for long-term disability benefits or if your claim has been denied by Reliance Standard or another insurer, do not risk making a procedural error. The stakes are too high. Contact The Garner Firm today for a comprehensive consultation. Let our experience be your advantage in securing the benefits you need and deserve.