Can an Employee Make a Midyear Cafeteria Plan Election Change on Account of Financial Hardship?

QUESTION: One of our employees elected to contribute $2,000 to his health FSA for 2025 to help pay for anticipated dental work. He just bought a new house, and now he says he cannot afford to continue contributing to the health FSA. He wants to reduce his health FSA election for the rest of the year and says he is postponing the dental work to save money. Can we allow him to make this change?

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