What is an Agent of Record (AOR)?

An Agent of Record (AOR) is a person or company authorized to act on your behalf with insurance carriers, benefits providers, or government agencies. They handle paperwork, manage renewals, and coordinate with vendors, but they don't become your employer or co-employer.

AORs are most common in benefits administration and insurance, not contractor management. If you're hiring contractors, you probably don't need an AOR.

What an AOR actually does

An AOR acts as your authorized representative with insurance and benefits providers. Common responsibilities include enrolling employees in health insurance plans, managing annual renewals, coordinating coverage changes when employees join or leave, handling claims issues and appeals, negotiating rates with carriers, comparing plan options, managing policy changes, filing required compliance forms with carriers and agencies, and serving as the point of contact between your company and benefits providers.

The key distinction is "agent"—they represent you and act on your behalf, but they don't take on employment liability or become your employer. They have authorization to act, not ownership of the relationship.

AOR vs EOR vs PEO: Understanding the differences

These models serve different purposes and have different levels of involvement:

AOR (Agent of Record) serves as an authorized representative. They have no employment liability because there's no employment relationship involved—they're just managing your benefits and insurance on your behalf. Their cost is typically $50-200 per month or 2-5% of premiums. Their typical use is benefits and insurance management without employment involvement.

EOR (Employer of Record) becomes the legal employer of full-time employees. They have full employment liability because they're legally the employer. They handle payroll, tax withholding, and benefits. Their cost is typically $299-685 per month per employee. Their typical use is international employee hiring.

PEO (Professional Employer Organization) co-employs your staff if you already have an entity. They share employment liability with you because you're both legally responsible. They handle payroll, benefits, and HR administration. Their cost is typically $100-200 per month per employee. Their typical use is domestic HR outsourcing.

The distinction matters. AOR is pure representation. EOR is full employment. PEO is shared employment.

When you might actually need an AOR

You might benefit from an AOR if you have employees and need professional help managing health insurance, 401(k) plans, or other benefits. If you want an insurance broker to negotiate rates with carriers, manage policy renewals, and handle plan changes. If you're spending too much time on benefits paperwork, vendor coordination, and compliance filings. If you need someone to serve as the official point of contact with benefits carriers.

You probably don't need an AOR if you're only hiring independent contractors (they handle their own benefits), you don't offer employee benefits, you're already using a PEO or EOR (they typically include benefits administration), or your team is small and benefits administration is straightforward.

AOR and contractors: Not relevant

If you're managing independent contractors, you typically don't need an AOR. Contractors are self-employed and handle their own health insurance, retirement savings, and benefits. They're not part of your benefits system.

What you do need for contractors is different: written contractor agreements that specify scope of work, payment terms, and intellectual property ownership. Payment tracking including invoices, payment confirmations, and an audit trail. Tax documentation (W-9 for U.S. contractors, W-8BEN for international contractors). Project and milestone management to track deliverables and deadlines. Compliance documentation showing the contractor relationship is legitimate.

An AOR doesn't help with any of these contractor-specific needs. AORs focus on benefits administration for employees, not contractor management.

Frequently asked questions

Can an AOR help with contractor compliance?

Not typically. AORs specialize in benefits and insurance administration for employees, not contractor classification or payment compliance. For contractor compliance, you need proper independent contractor agreements, documentation showing the contractor relationship is legitimate, payment records, and tax forms. These are separate from AOR services.

Is an AOR included in a PEO?

Often yes. Many PEOs include AOR services as part of their benefits administration package. They act as the AOR for your employee benefits (managing insurance, 401(k), etc.) while also co-employing your staff. This bundling is convenient but means one vendor handles both employment and benefits.

How do I designate an AOR?

You sign an AOR authorization form that gives the agent official permission to act on your behalf with specific insurance carriers or benefits agencies. This form is typically provided by your insurance broker or benefits administrator. Once signed, the AOR can handle renewals, changes, and claims on your behalf.

Can I change my AOR?

Yes. You can revoke AOR authorization from one agent and designate a new one at any time. This is common when switching insurance brokers, changing benefits administrators, or moving to a different benefits provider. Revocation is typically a simple process—notify the current AOR and new AOR in writing.

How much does an AOR cost?

AOR fees vary. Some charge flat monthly fees ($50-200 per month depending on complexity). Others charge a percentage of premiums (2-5%). Some brokers include AOR services in their commission. Ask your benefits administrator or insurance broker about their specific AOR pricing.

Is AOR the same as a broker?

Related but not identical. A broker helps you shop for and select insurance or benefits plans. An AOR is the officially designated representative who manages those plans on your behalf. A broker might become your AOR, but not all brokers do (some only help with selection, then step back).

The bottom line

An Agent of Record is a specific role in benefits and insurance administration. They represent you with carriers and agencies but don't take on employment liability. AORs are useful if you have employees and want professional help managing benefits.

For contractor management, AORs are irrelevant. Contractors handle their own benefits because they're self-employed. What matters for contractors is proper agreements, payment tracking, documentation, and compliance—not benefits administration.

If you're hiring employees, an AOR can simplify benefits management. If you're hiring contractors, focus on contractor-specific tools: agreements, payment tracking, and proper documentation. These are different needs requiring different solutions.