Can a Mississippi public utility commission offer different employer-paid health insurance percentages to employees who join a wellness program versus those who don't?

Plain-English summary

The Clarksdale Public Utilities Commission (CPUC) had been paying 100% of its employees' group health insurance premiums. It wanted to split the workforce into two groups: those who voluntarily participate in Blue Cross Blue Shield of Mississippi's "Healthy You!" wellness program (employer continues to pay 100%) and those who do not (employer pays 70%). The CPUC's attorney, David Hunt, asked whether Mississippi law allowed that two-tier structure.

The AG's office, through Special Assistant AG Maggie Kate Bobo, said yes, with one important caveat: every employee within a given group must be treated the same. The reasoning starts with two prior AG opinions confirming that commission employees under § 21-27-13 are municipal employees in every respect, and that establishing such a commission delegates broad authority to the commission (Hammack, 1997; Clark, 2003).

The governing statutes are § 25-15-101 (the governing board "may negotiate for and secure for all or specified groups of employees and their dependents ... a policy or policies of group insurance") and § 25-15-103(4)(a) (a municipality "may provide group life insurance coverage for all or specified groups of its public employees and group hospitalization benefits ... and the municipality may pay the total of the cost of all benefits"). The phrase "specified groups" is what carries the result. A 2020 opinion (Munn) had already concluded that the board has discretion over whether all employees or only specified groups receive a particular level of coverage. A 2018 opinion (Keith, citing 1994 Creekmore) emphasized the limit: within any specified group, all employees must be treated the same way.

Reading those together, the AG concluded the wellness/non-wellness split is permissible. The AG also flagged a procedural caveat from a 2005 opinion (Rutledge): if a municipality wants to stop providing a benefit it has been paying for, it must give "reasonable notice" to its employees. Switching some employees from 100% to 70% employer contribution likely falls within that notice obligation. The AG also expressly noted, citing § 7-5-25, that this office's opinions interpret only state law and cannot interpret federal rules, regulations, or law (relevant here because ERISA, HIPAA wellness rules, and ACA provisions also bear on tiered wellness incentives).

What this means for you

If you run HR or benefits for a Mississippi public utility commission, county, or municipality, the opinion reads §§ 25-15-101 and 25-15-103(4)(a) as permitting a two-group split based on voluntary wellness-program participation, subject to one stated condition: every employee within the same group must be treated the same way. The opinion also restates an earlier caution (the 2005 Rutledge opinion) that a public employer wishing to stop paying for a benefit it previously covered must give employees "reasonable notice." The opinion does not address federal law at all: it states expressly, under § 7-5-25, that the AG cannot interpret federal rules, regulations, or law that may apply to a tiered wellness arrangement.

If you are a municipal employee facing this change, the opinion does not give you a right to keep your current 100% coverage if you decline the wellness program. It does restate the reasonable-notice point from the Rutledge opinion before an employer reduces a benefit it has been paying for.

Common questions

Q: How big can the spread between the two groups be?
A: The opinion did not set a cap on Mississippi-law grounds. Federal law (ACA, HIPAA) imposes its own limits on the size of wellness incentives, but those are outside the AG's scope.

Q: Could the commission create three or four groups instead of two?
A: The statute says "all or specified groups." Multiple groups are permissible in principle; the AG's same-treatment-within-each-group constraint would still apply to each group separately.

Q: What if the wellness program requires biometric screening or weight goals?
A: The opinion does not address that. It limits itself to state law and states the AG cannot opine on federal rules, regulations, or law, which is where wellness-program design rules largely sit.

Q: How much notice is "reasonable" before reducing employer contributions?
A: The opinion does not specify a number. It restates the requirement from the 2005 Rutledge opinion that an employer give "reasonable notice" before ceasing to pay for a benefit, without defining how much.

Background and statutory framework

Mississippi's municipal-insurance authorization comes from two parallel statutes. Section 25-15-101 covers counties, municipalities, and similar local units; § 25-15-103(4)(a) is the dedicated municipal provision. Both authorize coverage for "all or specified groups" and authorize the local body to pay "the total of the cost." Section 7-5-25 limits the AG's opinion authority to questions of Mississippi state law.

The opinion's reasoning chain pulls together five prior AG opinions: Hammack (1997, § 21-27-13 commission employees are municipal employees); Clark (2003, broad delegation to commissions); Creekmore (1994, same treatment within a specified group); Keith (2018, restating same-treatment principle); Munn (2020, discretion to provide coverage to specified groups); and Rutledge (2005, reasonable notice before reducing a benefit).

Citations

• Miss. Code Ann. § 25-15-101 (county/municipality group insurance authority)
• Miss. Code Ann. § 25-15-103(4)(a) (municipal group insurance authority)
• Miss. Code Ann. § 21-27-13 (public utility commission)
• Miss. Code Ann. § 7-5-25 (AG opinion authority limited to state law)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2026/05/D.-Hunt-May-14-2026-Classification-of-Groups-of-Municipal-Employees-for-Purposes-of-Insurance-Coverage.pdf

Original opinion text

May 14, 2026

David R. Hunt, Esq.
Attorney, Clarksdale Public Utilities Commission
1192 West Lakeshore Drive
Starkville, Mississippi 39759

Re: Classification of Groups of Municipal Employees for Purposes of Insurance Coverage

Dear Mr. Hunt:

The Office of the Attorney General has received your request for an official opinion.

Background

The Clarksdale Public Utilities Commission ("CPUC") has elected to provide health insurance for its employees and their dependents. CPUC currently pays 100% of the cost of its employees' group insurance coverage but is exploring establishing two different groups of employees based on whether they choose to participate in The Healthy You! Program of Blue Cross Blue Shield of Mississippi (the "Program"). For employees who choose to participate in the Program, the CPUC will pay 100% of the cost of the employees' insurance coverage, but the CPUC will only pay 70% of the total coverage cost for employees who choose not to participate in the Program.

Question Presented

Is it permissible for CPUC to establish two groups of employees, based on their voluntary participation in the Program, and pay different costs of group insurance for such employees or provide different coverages for those employees?

Brief Response

Provided that the CPUC treats all employees within the same group in the same manner, Mississippi law does not preclude CPUC from establishing two groups of beneficiaries based on their participation in the Program.

Applicable Law and Discussion

As an initial matter, in accordance with Mississippi Code Section 7-5-25, opinions issued by this office are limited to matters of state law. We cannot, by official opinion, interpret any rules, regulations, or federal law that may be applicable.

We first note that our previous opinions have found that employees of a commission established pursuant to Section 21-27-13 are to be considered municipal employees in every respect. MS AG Op., Hammack at 2 (May 9, 1997). We have also determined that when a municipality establishes such a commission, the municipality delegates broad authority to the commission. MS AG Op., Clark at 1 (Mar. 21, 2003).

Turning to the relevant statutes, Section 25-15-101 provides:

The governing board of any county [or] municipality . . . may negotiate for and secure for all or specified groups of employees and their dependents of such county or municipality, or institution, department . . . a policy or policies of group insurance covering . . . life . . . health, accident, and hospitalization . . . .

Section 25-15-103(4)(a) states:

A municipality may provide group life insurance coverage for all or specified groups of its public employees and group hospitalization benefits for such public employees and their dependents, and the municipality may pay the total of the cost of all benefits under this section.

You ask whether, under these statutes, a utility commission may assign its employees to different groups to provide different levels of coverage based on the employees' voluntary participation in the Program. Previously, this office has opined that "[i]t is our opinion that, pursuant to Section 25-15-101 and Section 25-15-103, the board of supervisors may lawfully provide group life insurance coverage for all or specified groups of its public employees and group hospitalization benefits for such public employees and their dependents, and the county may pay the total of the cost of all benefits under this section." MS AG Op., Munn at *1 (Jan. 31, 2020) (emphasis added). In that same opinion, we reasoned that the County had discretion over whether all employees or only specified groups would be provided a certain level of coverage. Id.

We have also said that Sections 25-15-101 and 25-15-103 "contemplate that when the governing authorities of a municipality elect to provide group health insurance for their employees and dependents that all employees within a specified group be treated in the same manner regarding the payment of the cost of said dependent coverage." MS AG Op., Keith at 2 (Feb. 2, 2018) (citing MS AG Op., Creekmore at 1 (Nov. 2, 1994)). We do not read these statutes as precluding a commission from establishing two groups of employees to provide different levels of coverage, provided that the commission treats all employees within each group in the same manner. There is no other Mississippi statute that would preclude CPUC from establishing two groups of employees based on their participation in the program. However, this office has previously cautioned that if a municipality wishes to cease providing a benefit to its employees that it has previously paid for all or part of, the municipality must provide its employees "with reasonable notice." MS AG Op., Rutledge at *1 (Feb. 4, 2005).

Accordingly, it is the opinion of this office that so long as CPUC treats all employees within each group in the same manner, CPUC may establish two different groups of employees based on their participation in the Program. We cannot opine on any rules, regulations, or federal law that may be applicable to this question.

If this office may be of any further assistance, please do not hesitate to contact us.

Sincerely,

LYNN FITCH, ATTORNEY GENERAL

By: /s/ Maggie Kate Bobo
Maggie Kate Bobo
Special Assistant Attorney General