Out of appropriations made for that purpose, the personnel division of the Department of Administrative Services shall (1) first enter into a contract providing, entirely at state expense, ten thousand dollars of basic life insurance protection and (2) enter into a contract to purchase a contract of group health insurance to be financed by the state to the extent that appropriations made for that purpose are available and, if necessary, by contributions from each employee. Each such contract shall provide insurance coverage for each employee specified in section 84-1601. Participation in the program of group health and life insurance shall be optional with the employee.