The Galway side recorded a first-ever Heineken Cup win a week ago but have struggled in the RaboDirect PRO12 and currently lie 11th in the table.
And Elwood is desperate to ensure the good work in making Connacht more competitive in recent years is not wasted with these changes.
"You can look at it two ways; you hope it can work in your benefit, but when this kicks in it will have a stress on the four teams, because every other club will look after holding on to their Irish players," said Elwood.
"It is in the balance. It has been put out there by the IRFU and it is up to the other provinces to fight with the IRFU on that. I don't know if it is a done deal, but it is out there.
"We are working away at that, trying to increase our squad and to make us competitive in the key areas.
"We are treated completely differently to the other boys with regards the status of non-Irish players, so it doesn't affect us.
"We have our own agenda that we are working on with the IRFU in health and succession planning and that is still a work in progress. We cannot have eight or nine non-Irish qualified players, but we have extra special projects that we can get if we want them as well as the four non-Irish players."
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