BEND, Ore. (CNN/Money) – Open enrollment season is here, which means companies will soon be doling out packets of information and asking you to choose your insurance plan for 2004.

This year, you'll want to actually read through all of that information.

"Employees can expect to see stark changes from what they've seen in the past," said Jim Winkler, a healthcare consultant for Hewitt Associates.

Hit by the one-two punch of rising healthcare costs and shrinking budgets, employers are passing on more healthcare costs to employees. According to the Kaiser Family Foundation's most recent employer benefits survey, in fact, 79 percent of all large employers are likely to increase employees' share of healthcare costs in the coming year.

Last year, employers either increased annual premiums or raised out-of-pocket costs, and this year, said Winkler, they're expected to do both. "Employees' increases in healthcare costs could easily equal or exceed their pay increases," he added.

There is some good news: The plans themselves, though more expensive, are actually improving, with more doctors being added to networks and more services included.

The impact on cost will show up in three areas: Premiums, deductibles and co-payments.

Higher Premiums In 2003, workers deducted an average of $508 a year from their paychecks to pay for individual health insurance premiums and $2,412 a year for family coverage, according to Kaiser. These numbers will likely rise (again) in 2004.

Families in particular should brace for higher premiums, as many employers have been getting stingier about subsidizing spouses and children. For this reason, dual-income families will want to carefully compare plans from both employers.

Higher Deductibles The majority of employees now pay a deductible before healthcare expenses are covered by their plan. Preferred provider organizations (PPO), the most popular type of plan, now carry an average deductible of $275 for in-network service and $561 for out-of-network service.

Employees are likely to see increases to their deductibles as well, said Gary Claxton, vice president of the Kaiser foundation.

Changing Co-pays You can expect to see co-payments for office visits inch up or even be replaced with what's known as "co-insurance," in which case you pay a percentage of the doc's bill.

"Plans are moving away for paying 100 percent," said Winkler. "People shouldn't be surprised to see their $10 co-payment plan replaced by one that has a $300 deductible and only covers 80 percent of the charges."

Most plans set an upper dollar limit for what you'll have to pay out of pocket in any given year. That limit, also known as the out-if-pocket maximum, can range from the thousands to tens of thousands of dollars.

While you'll want to take note of that amount when comparing plans, you should make sure you understand what does and does not fall under that stopgap. "Employers are beginning to exclude more services from that maximum," said Claxton.

In addition, more plans are using "tiered" pricing for determining your drug co-payment. For example, you might pay $9 for a generic drug but $29 for a similar brand-name drug. Claxton believes that even more tiers will be added in the coming year.

"You may have a $50 or $100 co-payment for some prescriptions, or you may pay a percentage of the cost rather than a flat fee," he added.

One addition you may see this year is a high-deductible plan, also known as a "consumer driven" plan. Although they are not very common yet, more and more companies are starting to offer them as an alternative to traditional managed care.

As you might gather from the name, such plans carry a steep deducible, typically $1,000 to $2,000 for an individual and $2,000 to $4,000 for a family, according to Jay Coldwell, product director for Wausau Benefits. But, employers help out by contributing money to a tax-free medical savings account, typically putting in half the deductible.

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If you're healthy, you might not pay a single penny out of pocket. Even better, many plans allow employees to roll over unspent funds into the next year.

On the flip side, if your expenses add up to more than what your employer contributed to the savings account, you'll be responsible for making up the difference before you're covered by your insurance.

"These plans will save healthy people money but will be costly for people with more medical needs more," said Kathleen Stoll, director of health policy for Families USA.

With out-of-pocket costs rising as they are, now more than ever there is value in contributing to a flexible spending account (FSA). The majority of large employers offer such accounts to their employees, who are able to save up to $3,000 – tax free – for eligible expenses.

Now, during open enrollment, is when you must opt to contribute to your FSA. If you've used an FSA in the past, you should have a pretty good idea of what amount to save. If you're starting from scratch, set aside enough to cover the out-of-pocket costs you expect to pay, but be conservative because the "use it or lose it" rule does not allow you to roll over money left in your FSA each year.

Of course, these days it's easy to burn through that FSA savings pretty quickly, and not just because costs are going up.

Many employers automatically deduct money from your FSA and cut you a check for co-payments and other costs that are tracked by your insurance company. Also, more medical goods and services are being added to the Internal Revenue Service's list of qualified expenses. As of September, you can even be reimbursed for over-the-counter drugs.