Yes, it is legal. The point of the bonus is to share with employees some of the savings the employer (the district) gets from not having to pay for your health insurance. But if your wife also works for the district and accepts insurance from it, they are still paying for a policy for your family: they are paying as much for your family as they would if one of you worked elsewhere (or did not work) but were covered under the insurance of the one who was the district employee. There is no saving to them; hence no reason to pay you a bonus.