(MONEY Magazine) – THE REPUBLICANS IN CONGRESS AREN'T THE ONLY ONES BENT on cutting entitlements and promoting self-reliance. Chances are your employer has joined the crowd too. In the past several years, you've no doubt noticed your company health-care package becoming less lush, your retirement plan turning you into a fund picker and a raft of other seemingly unassailable corporate entitlements staging a disappearing act. The message from the corner office is loud and clear: "We're not here to take care of you anymore."

That tune isn't likely to change anytime soon, either. Employer benefits costs keep going up--since 1991, for instance, benefits costs have risen twice as fast as inflation. Those kinds of hikes encourage corporate bean counters to look hard for new ways to cut back. Plus, says Seymour LaRock, executive editor of Spencer Research Reports, a Chicago employee-benefits research publication, "Employers feel they no longer have to use the carrot of benefits to attract and retain employees." The reason: Ongoing job insecurities have put employees on the defensive.

Just look at the winners of our fifth annual survey of the companies with the best employee-benefits plans, led by overall champ Xerox. Out of the 10 companies we identified as the most generous in America (see the table on pages 104-105), six have trimmed benefits over the past year. For instance, Bell Atlantic (ranked No. 6) and AT&T (No. 7) have both dropped their traditional fee-for-service medical plans (and AT&T also announced significant layoffs for 1996). Even top-rated Xerox has cut back: It scrapped its company-sponsored health plan for '95 and future retirees and instead began offering them an average $1,600 stipend to purchase coverage on their own.

Happily, not all the news on the benefits front is bad. Our top 10 companies--and dozens more, for that matter--still provide employees with an attractive array of perks. No. 1 Xerox, for instance, offers its 85,600 worldwide employees an innovative life-cycle assistance program that gives workers a $10,000 lifetime stipend they may use (at a $2,000 annual cap) to pay for such needs as child or elder care or, as in the case of Anna Maria Crumb, 29 (pictured above), of Rochester, N.Y., to help fund the purchase of a first home. Still, today's intensifying benefits revolution means that you must stay on top of your plans to get the most from them. Then too, you must increasingly make wise choices among the proliferating options.

To help you stay ahead of the changes, we turned first to the four respected authorities who helped us rank the company plans of our top 10: Ted Benna, a Langhorn, Pa. pension expert and a creator of the 401(k) savings plan in 1980; Dana Friedman, co-president of the Families and Work Institute, a New York City research firm that has been tracking work and family policies since 1989; Arthur Goldstein, a life and disability insurance expert at the PFR Agency of Guardian Life Insurance in New York City; and Maria Maddaloni, a performance measurement manager at Harvard University Health Services in Cambridge, Mass. who specializes in measuring employee satisfaction with health care. In addition, we consulted a half-dozen expert benefits consultants and human-resources managers.

Here is what's new in benefits today--and what you ought to be doing:

HEALTH CARE AND INSURANCE

No shocker here: The movement away from pricey fee-for-service health plans to low-cost managed-care plans will continue full force for the foreseeable future. Already, employers have guided 63% of their employees into network plans, up sharply from 52% in 1993, according to Foster Higgins, the New York City benefits consulting firm.

What is new, though, is that you soon may have extra help in deciding which PPO (preferred-provider organization), HMO (health maintenance organization) or POS (point-of-service) plan to pick. That's a welcome development, since more and more companies provide multiple choices of plans these days. A few large corporations, such as American Express, IBM and Nynex, have already instituted their own quality checks on the managed-care plans they offer, and AmEx shares the results with its employees. Other companies are sure to follow suit. In addition, several industry groups, such as the National Committee on Quality Assurance (NCQA), will continue to analyze plans that are available to consumers. So far, the NCQA has graded roughly 230 HMOs. In June, it will begin releasing detailed summary reports that show how each HMO stacks up, for instance, in physician qualifications and preventive-health services.

Other news: You'll have increasing opportunities to buy insurance products, like long-term care (LTC) and short- and long-term disability (LTD), through your company at subsidized rates. About 10% of firms already offer LTC policies at discounted group rates and another 27% plan on adding the option over the next three years, according to Hewitt Associates, a Lincolnshire, Ill. benefits consulting firm that has recently polled a diverse group of 450 American companies.

Advice: Lobby your employer to provide information that measures the quality of your health plans. Then, when you join a managed-care plan, choose your primary-care physician (PCP) carefully, advises health-care expert Maddaloni. Look for a PCP who is affiliated with a top nearby hospital and who preferably belongs to more than one plan. That way, if you switch jobs, you may not have to switch docs. Still in a traditional indemnity plan? Ask whether your doctor has affiliated with a managed-care plan since your last visit. In 1994, 77% of physicians were affiliated with at least one managed-care plan, up from 61% in 1990. If yours is among them, check into enrolling in the plan the doctor joined so that you can shave your out-of-pocket costs.

The advice for other insurance benefits is to sign up--and pay--only for what you truly need. Long-term-care coverage, for example, is rarely necessary for anyone under age 45. On the other hand, disability coverage is critical for virtually all jobholders. Skeptical? Don't be. In fact, the odds are one in five that a 40-year-old worker will be laid up for five years or more before age 65. Insurance expert Goldstein's suggestion: Insure for the maximum long-term disability your plan allows, then consider buying more coverage from the company or a private plan if your disability benefits will not replace at least 60% of your current compensation (including bonuses, overtime and commissions) to age 65, when Social Security kicks in.

RETIREMENT PLANS

Employers continue to hammer home the point that it's up to you to save and invest for retirement. Traditional company-funded pension plans that paid a lump sum or annuity upon retirement have been losing ground to employee-managed, tax-deferred savings plans, such as 401(k)s. From October '93 to Sept '94, for instance, the IRS received more than seven times as many initial applications from companies to create 401(k) plans as they did applications for pension plans. Small wonder: Not only do traditional pension plans cost roughly twice as much to fund and administer as do 401(k)s, they arguably do not serve today's mobile work force as well. According to the Employee Benefits Research Institute in Washington, D.C., only 17% or so of workers stay with one company for more than 30 years--long enough to earn a top pension--and more than half of today's work force changes jobs every five years. With a 401(k) plan, your money builds up over time, and when you leave the company, you can roll your savings into your new employer's plan or into a special, tax-deferred retirement account you set up at a bank, brokerage or mutual fund.

Lately, employers have also been offering their employees greater investing choices in 401(k)s because they have become concerned by the threat of lawsuits from financially ill-prepared retirees. Further, many companies are adding investing education seminars. According to Hewitt, nearly two out of every 10 companies plan on offering group financial planning services to employees over the next three years. In addition, many employers are starting to offer software programs that can help you design a model retirement portfolio customized to your needs.

Advice: Continue to stoke your 401(k) with as much cash as you can afford--at the very least up to the amount your employer matches, typically 6% of salary each year. Enroll in investing seminars to learn more about your options, or request that your employer offer instructional programs. Then draft a retirement plan that establishes when you want to retire and how much you will need to be saving to reach that goal. Advises 401(k) guru Benna: "If you just save without a plan, it will be a matter of dumb luck if you get it right."

TIME OFF AND SPECIAL PERKS

To appease harried workers, employers will be adding more lifestyle and wellness benefits, which are relatively inexpensive for them. One of the fastest-growing perks is emergency or sick-child care centers that can help when your kid or babysitter falls ill. Although only 13% of companies now provide such aid, that's up from a scant 5% only two years ago. It's a smart employer move. According to a study by Work/Family Directions, a Boston consulting firm, every dollar spent on family programs returns at least $2 to the employer through reduced absenteeism. Relay that stat to your human-resources department!

And to create a healthier and more cost-efficient work force, 10% of companies now offer cash or benefit credits if you, say, quit smoking or lose weight. Indian Industries, a sporting goods manufacturer in Evansville, Ind., for example, rewards participants in its maternity program with a $50 savings bond and pays for nicotine patches for smokers who quit and don't smoke again for at least two years. Stay tuned--another 18% of U.S. companies will add these incentives in the next few years.

Watch also for flexible work schedules to be adopted by more employers. Currently, although nearly a third of companies offer alternative work arrangements--such as job sharing, compressed workweeks and telecommuting--they do not necessarily encourage employees to use them. Technological advances, however, and a growing realization that flexible schedules spell a more motivated and cost-efficient work force will make such arrangements more acceptable over the next few years.

Advice: Plumb your benefits for individualized perks, such as child-care assistance and health benefits that you may have overlooked or not needed before. Been fantasizing about working from home a day or two each week? Now's the time to approach your boss. Suggests Families and Work Institute's Friedman: "Just be sure to have a clear plan of how you will accomplish your work before making your request, and don't be modest about your capabilities." Ultimately, the more you take control of your benefits, the more power you'll have over your career, your money and your life. Self-reliance has its own rewards.