1. Separate accounts for medical, life insurance and disability benefits provided pursuant to sections 104.1072 and 104.1075 shall be established as part of the fund. The funds, property and return on investments of the separate accounts shall not be commingled with any other funds, property and investment return of a system. All benefits and premiums are paid solely from the separate accounts for medical, life insurance and disability benefits provided in this section.

2. The state shall contribute an amount as appropriated by law and approved by the governor per month for medical benefits, life insurance, and long-term disability benefits as provided pursuant to sections 104.1072 and 104.1075 and such amounts shall include the cost of providing such benefits to members not on payroll status who are receiving workers’ compensation benefits.

3. Each board shall determine the premium amounts required for participating persons. The premium amounts shall be the amount which, together with the state’s contribution, is required to fund the benefits provided, taking into account necessary actuarial reserves. Separate premiums shall be established for employees’ benefits and a separate premium or schedule of premiums shall be established for children under twenty-three years of age and for spouses of participating employees. The employee‘s premiums for spouse and children benefits shall be established to cover that portion of the cost of such benefits which is not paid for by contributions by the state. All such premium amounts shall be paid to a board of trustees at the time that each employee’s wages or salary would normally be paid. The premium amounts so remitted will be placed in the separate account for medical, life insurance and disability benefits. In lieu of the availability of premium deductions, each board may establish alternative methods for the collection of premium amounts.