Mississippi recently passed legislation that allows local governing authorities offer supplemental compensation to employees who are eligible for the group insurance but opt out of coverage. If an employee is eligible for the municipal insurance, but elects not to enroll, then the employee may receive supplemental compensation in an amount up to the amount of the premium costs incurred by the municipality Some are now questioning if this runs afoul of federal law, particularly 42 U.S.C § 1395y(b)(3)(C), which provides: (C) Prohibition of financial incentives not to enroll in a group health plan or a large group health plan.-It is unlawful for an employer or other entity to offer any financial or other incentive for an individual entitled to benefits under this title not to enroll (or to terminate enrollment) under a group health plan or a large group health plan which would (in the case of such enrollment) be a primary plan (as defined in paragraph (2)(A)). Any entity that violates the previous sentence is subject to a civil money penalty of not to exceed $5,000 for each such violation. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). Has anyone run across this question? If so, can you please share some insights? I've read through the federal regs, and tried searching the HHS guidance and cannot find an answer as to whether the above federal code section is: 1. Applicable and, if so, 2. If supplemental wages would constitute an "incentive" Thank you for anyone who may help. Anthony "Tony" Nowak tony@smithphillips.com<mailto:tony@smithphillips.com> Smith, Phillips, Mitchell, Scott & Nowak, L.L.P. 2545 Caffey Street Hernando, MS 38632 662-429-7888 www.smithphillips.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.smithphillips.com&d=DwMFAg&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=Dw5APvi2kK-BJeFEx0e4YelQY3aVJbeMkiqSZ-70BXw&m=-0wmfdFUjyGu_rGertCnB4DBbfEVEzeHjTMLe3KM32c&s=f--_NiuM_GToHkwWxXeRv6PTGDiZLex3Dq3cVoValpA&e=> The information contained in this email transmission is legally privileged and confidential information intended solely for the use of the individual(s) named above. If you, the reader of this message, are not the intended recipient, you are hereby notified that you should not further disseminate, distribute, or forward this email transmission message. If you have received this email in error, please immediately notify the sender. Smokeball Reference: 17eb3690-546b-4cd8-b34c-afdba66a1522/8fcb438a-93f5-4748-8227-e6e086fd9b0d.