The survey of 723 U.S. employers was conducted jointly by Mercer and Marsh, both subsidiaries of New York City- based Marsh & McLennan Companies.

Survey respondents ranged from employers with as few as 100 employees to employers with more than 10,000 workers. The surveyed plans cover 6,158 employees, on average, the company said.

Among companies in the survey, 49 percent said that controlling the direct cost of absence was a top priority, followed by 47 percent who put reducing the cost of absence on operations as a top priority.

The average workers' comp cost increase translated into an increase of $1.80 per $100 of payroll from $1.50 in 2000. However, the firms said, the findings understate the increase in workers' comp because they do not fully reflect the sharp rise in insurance costs that began at the end of 2000 and were exacerbated by the Sept. 11 terrorist attacks, the authors of the survey noted.

Employers are implementing more cost control measures, the survey found. For instance, 82 percent said they use telephone case management to address workers' comp costs, and roughly the same percentage, 81 percent, have return-to-work programs. Seventy-three percent said they use field case management and 67 percent provide utilization management.

The survey also found that many employers have experienced significant increases in the incidence of long- and short-term disability.

During a two-year period, long-term disability incidence rates increased among 26 percent of the employers that measured it, and decreased among just 9 percent. Short-term disability incidence rates increased for 33 percent of employers during the same period, while only 10 percent reported a decrease in incidence rates.

The survey discusses the experience employers have had with the Family Leave Act and broad-based time-off plans. It also discusses the type of conditions employers are seeing and the allocation of workers' comp costs by employers.

Information concerning the "Survey of Employers' Time-Off and Disability Programs' is available at www.imercer.com or by calling (212) 345-2451.