Will benefits, especially health insurance, that companies provide their employees go the way of the dodo bird and passenger pigeon by the year 2000?

Paid vacations, health insurance, holidays off with pay and other benefits that have been provided for years might be reduced by the year 2000, mainly because of the increased cost to the business, according to a survey conducted for Northwestern National Life Insurance Co., Minneapolis.Three years ago, the company conducted a similar survey of 600 employers across the country, and two-thirds of them said they planned to add benefits for their employees. But the latest survey indicates a majority of them will be offering fewer benefit choices.

Michael Conley, senior vice president of NWNL's group insurance operations, said, "The health care system is being turned on its head right before our eyes."

In replying to the survey, the personnel director for a Los Angeles manufacturing company said, "Our costs to provide health insurance have risen 300 percent in the last five years. The reason is rising hospital costs and, second, rising doctors fees. If this trend continues, either we cut benefits or go out of business."

Conducted by IMI Research Corp., Minneapolis, the survey of 400 companies employing 3.9 million workers published these findings:

- We can look forward to another decade of soaring health care costs, already up an average of 10 percent a year during the 1980s.

- Health care obligations to retirees will take a larger bite out of the country's health care expenditures.

- Employees will be picking up more of the tab with few choices in where and how to get medical care.

- Half of those surveyed predicted some type of national health insurance will be in the place by the year 2000. More than 25 percent of those surveyed see this as extremely likely.

- Employees are worried that the quality and affordability of health care will continue to erode as they are forced to limit contributions and government steps in.

Dallas Salisbury, president of the Employee Benefit Research Institute, said the survey shows employers are frustrated. "Still, we're not ready to face the idea of controlling costs by limiting health benefits to catastrophic protection for all citizens. We're a nation that wants it all, but we can't figure out how to pay for it," he said.

Conley said the survey indicates a shift in public policy regarding who should pay for retiree health care. Last year congressmen said employers and individuals should pay for retiree health care costs, but this year the survey showed that many of the representatives said government will have to play a big role.

Many employers think government will intervene in an attempt to control health costs. Sixty percent predict mandates to businesses that extend insurance coverage to all workers. About 50 percent see national health insurance or regulation of doctor and hospital fees.

The survey said, "Employers expect that by the year 2000 the most effective and likely solution is for more of the burden to fall in employees in the form of fewer benefits that cost them a lot more."