Administrative Services Organization (ASO)

What is an administrative service organization (ASO)?

An administrative service organization (ASO) is an organization that performs administrative and human resource-related tasks for a client but does not operate under a co-employment model. This means that the business remains the employer of record for tax purposes and is responsible for any legal obligations associated with this. Additionally, with an ASO all programs are in the client’s name, and payroll and taxes use the client’s federal ID number.

An ASO varies from other organizations providing employee benefits, including professional employment organizations (PEOs) and employee leasing organizations (ELOs). The variations in these organizations result from the way the services are provided. While an ASO only provides services, keeping the employees under the care of the company, an ELO has worksite employees under their care, and a PEO has worksite employees who are employees of both the client and PEO.

Some of the tasks handled by an ASO include:

  • payroll support
  • HR administration
  • benefits administration
  • regulatory compliance


Why are ASOs important?

With an ASO, a facility receives an HR extension, including strategic HR planning. The employees of the business also see better benefits and minimized compliance risk.

In healthcare, an ASO can help healthcare practices handle some of the administrative tasks clinics and other healthcare locations would otherwise need to manage on their own. By outsourcing this work, physicians can instead focus on providing exceptional patient care, which is why many small and medium-sized facilities benefit from an ASO.