The employees of the following entities are eligible to participate in the Program upon the application of the entity, provided that, at the discretion of the Secretary, such participation does not impede, undermine, or conflict with the Program’s federal compliance obligations or governmental and cafeteria plan status: A county or municipal corporation with the approval of the governing body of the county or municipal corporation; and Agencies, commissions, or organizations permitted to participate in the State's health insurance program by law. Each entity identified in §A of this regulation shall permit the spouses and dependent children of its employees to be eligible for coverage but may elect whether and to what extent to provide a subsidy for the participation in the Program of its employees and their dependents.