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Cost may limit scope of benefits in future

Skyrocketing health-care costs will make it tough for companies to expand their employee benefits in the future, predicts Dallas Salisbury, president of the Employee Benefit Research Institute in Washington D.C. He said he expects U.S. spending on medical care to rise 12 to 15 percent a year on average for "as far as the eye can see," largely as a result of the introduction of new drugs and technology and the aging of the population.

"It's really going to put the emphasis on health benefits," he said.

Salisbury said when they are asked, employees pick health-care coverage as the benefit they want most. Pensions rank second, with all other benefits considered far less important.

"If it really gets down to making a choice, they choose health benefits," he said. Salisbury spoke via teleconference at a National Education Association forum for trustees of retirement and health plans, held last week at the Sheraton Sand Key Resort.

He said he believes only the wealthiest companies will be able to provide employees with a wide array of benefits in the future. In most companies, family benefits such as child care or elder-care assistance will be introduced only when the business finds them to be essential, he said.

However, he said some fast-food chains, not known for their employee benefits, already include a child-care room in some of their restaurants. The reason, he said, is that managers find they have to provide child care to get any part-time employees to work the lunch shift.

"If it's a matter of absolute necessity, businesses will provide it," he said. "We are fast approaching the point at which more than half the work force will be women."

Salisbury said "exotic benefits," such as legal assistance, long-term care insurance and employer-sponsored group auto insurance, are likely to fall by the wayside.

He predicts that Congress eventually will require employers to offer health insurance to all workers. Salisbury said a universal national health-insurance system seems unlikely because polls show that Americans are unwilling to pay the additional taxes that would be required to support it.

The institute is a non-profit research organization.