Co-insurance is a cost-sharing agreement between an insurer and an insured party. It says the insured will cover a set percentage of costs after paying a deductible.In co-insurance, the insurer and insured share the risk. For example, Sarah enters into an 80/20 co-insurance healthcare plan with ABC Insurance. It includes a $300 deductible, which is an amount set by ABC. Sarah must cover all of her medical care costs up to $300. After that, she is responsible for 20% of any medical care costs, and the insurance company will pay the other 80%. Typically, the plan resets at the beginning of every year. Some companies add a stop-loss clause to a co-insurance policy to protect themselves from especially large claims. And some co-insurance plans cap the out-of-pocket expenses the insured must pay before the insurance company assumes the rest of the bill. Co-insurance is similar to co-pay insurance, which requires the insured to pay a set amount at the time services are rendered. But a co-pay differs from a deductible, which is an amount you must pay before the insurance company pays anything. Many employers today are switching from co-pay insurance to co-insurance plans to reduce employee-benefit costs.