(A) Subject to federal waiver, the department shall provide transitional Medicaid and child care for a maximum of two years for AFDC clients who lose eligibility because of employment or who become employed after losing eligibility as a result of exceeding the twenty-four-month time limit provided for in § 43-5-1170. For individuals who become employed after a period of ineligibility due to exceeding the twenty-four-month time limit provided for in § 43-5-1170, earnings must be less than poverty and continued employment must be jeopardized by medical expenditures to be eligible for transitional Medicaid and child care in the second year.

(B) If a former recipient’s employer offers or provides health insurance coverage for the former recipient and/or the former recipient’s family at an out-of-pocket cost to the former recipient which is less than ten percent of the former recipient’s wages after deducting Federal Income Collection Act contributions, no Medicaid coverage may be provided to a family member who could be covered under the employer-provided insurance plan.