Kaiser Family Foundation, which recently released the results of its annual employment benefits survey, reports that employees participating in employer sponsored health-care plans will experience substantial increases in their benefits costs in the next few years.

In the past few years, benefits cost increases have been absorbed mostly by employers, who have been trying to offer competitive benefits packages ln a tight labor market and a strong economy.

But, an economic downturn and higher unemployment will cause employers to pass the rising health benefits costs on to employees, perhaps as soon as 2001, said Kaiser. ‘“Most Americans don’t know how much their employers are paying for their health care, they have been insulated from recent drug and health-care cost increases.”

According to a William M. Mercer survey recently released, 40 percent of employers say they will increase contribution levels in 2001 and 17 percent will raise deductibles, copayments, or out-of-pocket maximums.

Large employers (500 or more employees) are the most likely to shift costs — 58 percent will raise employee contributions and 26 percent will shift cost through other cost-sharing provisions.

Prescription drug costs played a big part in the cost increase in 2000, with employers reporting an average drug trend of 17.5 percent at the last renewal of their largest medical plan. (Drug cost rose 11.5 percent in 1998 and 15.2 percent in 1999.)

With drugs now accounting for about 14 percent of total medical plan cost, nearly all employers require employees to pay a portion of the cost of each prescription. However, employee copayments have not kept pace with cost increases.