Can my employer take my fringe benefit contribution (which the employer is required to pay) for each hour and put it in a 401k plan? And make me sign a new contract with these changes after I have already signed a 5 year contract?

I have highlighted some of the important things that was mentioned in this letter. Re: Importanat Changes to Our Fringe Benefits Program
As a Service Contract Act (SCA) contractor filling the needs of the Federal Government for positions in many sectors, IMS is required to provide a fringe benefit contribution for each hour you work. We will fulfill this obligation by making contributions for your insurance coverage. (Insurance coverage would not benefit me because I already have health insurance.) Any amounts not required to pay the premiums for the insurance program will be contributed to the IMS 401k retirement plan at the end of each quarter as a fully vested employer contribution to you account. We will also make contributions to the 401k plan for any part-time employees who do not qualify for the medical coverage. Please note that effective June 1, 2010, we will not provide a cash option in place of fringe benefits. Only employees who provide proof of other credible health coverage will be eligible to waive coverage under our health plan. Those employees will not recieve cash instead of medical plan. For those employees, we will make an employer contribution to our 401k retirement plan.
My original contract I signed on August 18, 2009 states that I am to recieve basic wage 13.78 plus 3.24 for fringe benefits = 17.02. The fringe benefit can be paid cash or take medical coverage. I had chose not to recieve medical and be paid cash. Can she do this?