Are You Accidentally Crossing the Line?

Coaching Ethics for Therapists: Are You Accidentally Crossing the Line?

If you’re a therapist who also offers coaching, there’s a good chance you’ve had at least one “Oh wait—is this even okay?” moment. Maybe it was when a coaching client started talking about their childhood trauma, or when a therapy client asked if they could switch to coaching so insurance wasn’t involved. Whatever it was, that little twinge in your gut? That’s your ethical Spidey sense tingling. And friend, you’ve got to listen to it.

In a recent episode of Love, Happiness, and Success for Therapists, I dove deep into the ethical dilemmas therapists face when they step into the coaching world. And let me tell you, the gray areas are real. So let’s break it down and make sure you’re navigating this space with clarity, integrity, and confidence.

The Insurance Trap: Are You Committing Fraud?

One of the biggest reasons therapists venture into coaching is to escape the insurance nightmare. (Because let’s be real—the struggle is real.) You have clients who don’t meet criteria for a mental health diagnosis but want to work on relationships, career goals, or personal development. They ask if you can just kind of make it work so insurance covers it. Tempting, right?

Except here’s the thing: That’s fraud. According to the APA, you can only bill insurance for medically necessary treatment of a mental health disorder. If you’re making up diagnoses to fit personal growth work into an insurance claim, you’re stepping into seriously dangerous territory. Coaching can be a fantastic alternative—but only if you do it ethically.

Scope Creep: When Coaching Clients Need Therapy

Let’s say you’re coaching a high-functioning professional who wants to level up in their career. Everything is going great until they casually mention they’ve been having panic attacks, can’t sleep, and are deeply depressed.

Uh oh.

If you’re not careful, you might find yourself doing therapy without calling it therapy. This is where it gets tricky: If your coaching client develops a clinical issue, you must refer them to therapy (and if you’re the right fit, that could be you—but only under a separate therapeutic contract in a state where you’re licensed). The National Board for Certified Counselors (NBCC) has clear guidelines on maintaining the distinction between coaching and therapy, and it’s crucial to follow them.

The Boundary Blender: Avoiding Dual Relationships

Boundaries can get real messy when you’re a therapist who coaches. Some common pitfalls?

• A current therapy client wants to switch to coaching.
• A coaching client asks if you can just do a little therapy when needed.
• A client wants to refer their spouse, best friend, or boss to you.

Even marketing can get dicey. Mainstream coaches (hello, Tony Robbins!) have free rein to ask for testimonials and share client wins on social media. But you? Nope. Therapists must follow confidentiality laws, and asking a client for a glowing review could be seen as coercive. The ACA Code of Ethics is clear: We have a different level of responsibility.