Medical FSA - Election change permitted ?

[Guest SusanMM]

Our employee has been covered under her husband's PPO through Medical Mutual. His union has advised that, on 4/1/07, the plan will become a POS plan through Kaiser. The union covers all permiums but, for example, using non-Kaiser providers will cause the participant to incur costs not previously anticipated. In addition, their deductible will increase from $300/person//$600/family to $1,000/person//$2,000/family. Given these unanticipated changes, would our employee be permitted to increase her Medical FSA contributions as of 4/1/07 or must she wait until next plan year (2008) ?

[QDROphile]

No mid-year change to the medical FSA under those circumstances. See Treas. Reg. section 1.125-4(f)(1).