(a) “State agency” means every state institution, board, commission, council, department or unit thereof created by the Mississippi Constitution or statutes.

(b) “Local governmental entity” means any county, municipality, school district, public hospital or other political subdivision of the state.

(c) “Cafeteria plan” means a written plan providing benefits to eligible employees which meets the requirements of Section 125 et seq. of the Internal Revenue Code and regulations thereunder.

(d) “Salary reduction agreement” means a written agreement between an eligible employee and a state agency or local governmental entity whereby the employee agrees to reduce his or her salary by a stated amount or an amount equal to the cost of benefits selected under a cafeteria plan and the state agency or local governmental entity agrees to contribute such amount to cover the cost of the benefits selected by the eligible employee.

(e) “Eligible employee” means an officer or employee of a state agency or local governmental entity who elects to participate in a cafeteria plan described in paragraph (c) of this section. The term includes state agency officers and employees whether or not engaged in state service, as defined in Section 25-9-107, Mississippi Code of 1972. The term does not include individuals:

(i) Engaged as independent contractors; or

(ii) Whose periods of employment are on an intermittent or irregular basis, or who are employed on less than half-time basis unless the individual is employed in a position classified as a job-sharing position.