This appears to be a qualifying cost and coverage change. However, the IRS does not specifically define a "significant cost change” — that term is supposed to be defined in the plan document. If the plan document will have to be modified to allow this kind of mid-year election, note that IRS regulations state the following:
“Change in coverage under another employer plan. A cafeteria plan may permit an employee to make a prospective election change that is on account of and corresponds with a change made under another employer plan (including a plan of the same employer or of another employer) if the other cafeteria plan or qualified benefits plan permits participants to make an election change that would be permitted …”
Source: Internal Revenue Code Sec. 1.125-4(f)(4).