Yes, it is legal if your wife's insurance is through her employer. The law does not make employers pay for or arrange to provide insurance coverage to empoyees' spouses if the spouse has the option to get coverage through his or her own employer--why should employer A, after all, have to pay extra to save empoyer B money, for example? So employer-provided insurance can state that if an employee's spouse is offered insurance through his/her own employer, they will not provide it to the spouse.
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