I get asked this question all the time:  Can I dissolve my small group health plan and just give money to my employees to buy individual health plans?  The answer is NO. 

The ACA law is VERY CLEAR.  This is not allowed as of January 1, 2014.  And yet, Employers keep asking the question...maybe because it was allowed pre-2014. I personally had many clients that did this, and I recommended they do this pre-ACA; of course, in order to buy individual plans, employees had to be deemed 'insurable' in the individual marketplace.  So this was not a good idea for groups that had employees with health conditions that would cause a rated policy, a waiver of specific conditions or possibly a decline.

However, now individual policies are guaranteed to be issued, regardless of health or prior coverage. There are rules about WHEN you can buy a plan (only during open enrollment or if you have a 'qualifying event' outside open enrollment). And while individual rates did increase substantially at the beginning of 2014, they are in many cases, still less than some group rates.  This may change over time...

With double-digit increases requested on individual policies across the US due to losses (and some Co Ops closing their doors due to the losses), we might be seeing a shift back to the employer group health plan, even in the small group marketplace (under 50 employees in 2015, expected to be under 100 in 2016 unless pending legislation passes) which is NOT required to offer health insurance by law.  However, group health insurance is the ONLY way for an Employer to write off premiums for employee's health insurance. 

P.S. The law does not prevent an employer from increasing salaries to help cover health care expenses; these increases would be fully taxable and subject to FUTA and FICA tax.

http://eba.benefitnews.com/news/eba_regulatory/can-employers-reimburse-employees-for-coverage-on-the-aca-exchanges-2742404-1.html