1. The board shall establish and implement programs as provided in sections 104.517 and 104.518. The board shall establish rules of eligibility for participation in the programs, and shall avoid duplication of benefits provided to employees, their spouses and children under any other program of benefits provided through, or as a result of, employment with a department, any other employer, or any plan established by the federal government. The benefits set forth in sections 104.517 and 104.518 shall be provided all employees complying with the rules of eligibility for participation established by the board for whom contributions are being made pursuant to subsection 2 of section 104.515. No member shall receive benefits until such program shall become operative and until any premium amounts required by the board have been paid. To the extent any benefits provided under this program are insured, the selection of any insurance company or service organization shall be on the basis of competitive bidding.

2. Notwithstanding any provision of law to the contrary, persons employed by an agency, division, or department, who would be employees pursuant to sections 104.320 to 104.620, except by reason of coverage under the retirement system established pursuant to sections 169.010 to 169.130, shall be eligible to participate in the program of life insurance provided pursuant to subsection 1 of section 104.517, and to continue such participation after retirement, under rules of eligibility for participation established by the board of trustees, and on the basis that such covered persons pay the premium rate as determined by the board.

3. Except for long-term disability benefits provided by section 104.518, the provisions of sections 104.516 and 104.517 shall not apply to members who are employed by any agency, division, or department which has in effect a program of life insurance which is wholly or partially paid by the employing agency, division or department.