(1) Any eligible employee may elect to have the employee's dependents covered by the group benefit plans. Such election shall be made at the time the employee becomes enrolled in the plan under such procedures as the director shall establish. If dependent coverage is not elected at the time that an employee becomes enrolled in an appropriate plan, any subsequent election of dependent coverage shall be made under such conditions asthe director may impose.

(2) Any employee who elects coverage, as provided in subsection (1) of this section, and who has a change in the number of dependents may, at the time of such change, increase or decrease the number of dependents covered by the group benefit plans under procedures established by and subject to the approval of the director.

(3) Any employee who has no eligible dependents at the time the employee becomes enrolled in the group benefit plans and who later has an eligible dependent may, at the time the dependency status changes, elect appropriate coverage for such dependent under procedures established by and subject to the approval of the director.

(4) If a dependent is no longer eligible for coverage because the dependent turned twenty-six years old, the director shall remove the dependent from the group benefit plan by the end of the month in which the dependent turned twenty-six years old. If the director fails to remove the ineligible dependent, the employee and the employee's department shall not be directly financially liable for the premiums paid for the dependent coverage if no claims have been paid for the ineligible dependent. If the director fails to remove the ineligible dependent and a claim has been paid for the ineligible dependent, the employee and the employee's department shall not be directly financially liable for the paid claim. The costs for premiums and claims paid may be paid from the group benefit plans reserve fund established in section 24-50-613.