Therapy, Coaching, and Everything In Between: Who Does What and Why It Matters

By Sarah Benitez-Zandi LCSW

If you’ve ever searched for support and found yourself buried under a pile of acronyms—LCSW, LMFT, LPC, PhD, ACC, CPC—you’re not alone. Add in that some folks are "licensed in some states but offer coaching in others," and it starts to feel like alphabet soup. Let’s break it down in plain language.

Meet the Licensed Mental Health Professionals (Clinical):

LCSW (Licensed Clinical Social Worker)

• Education: Master’s in Social Work (MSW)

• Training: 2-3 years post-graduate supervised experience, clinical licensure exam

• Focus: Mental health, trauma, life transitions, systems-focused support

• Billable to Insurance: Yes (for therapy, not coaching)

LPC (Licensed Professional Counselor)

• Education: Master’s in Counseling or Psychology

• Training: 2+ years of post-grad supervised practice, licensure exam

• Focus: General mental health, anxiety, depression, individual and group counseling

• Billable to Insurance: Yes

LMFT (Licensed Marriage and Family Therapist)

• Education: Master’s in Marriage and Family Therapy or related

• Training: Supervised experience specific to couples and families, state exam

• Focus: Relationships, family systems, communication issues

• Billable to Insurance: Yes (though coverage for couples therapy varies)

Psychologist (PhD or PsyD)

• Education: Doctoral degree in Psychology

• Training: Internship + postdoc (usually 6+ years total), state licensing exams

• Focus: Diagnosing mental health disorders, conducting assessments, therapy

• Billable to Insurance: Yes

Psychiatrist (MD or DO)

• Education: Medical degree + Psychiatry residency

• Training: Medical board certification

• Focus: Prescribing medications, psychiatric diagnoses

• Billable to Insurance: Yes

The Rise of Coaching: A Brief History

Coaching as a profession started gaining steam in the late 1990s and early 2000s as people began seeking more goal-directed support outside of traditional therapy. With the self-help movement booming and a growing desire for personal development in career, relationships, and wellness, coaching emerged as a flexible, stigma-free alternative.

As mental health services became more regulated and insurance-dependent, coaching filled in the gaps—providing action-oriented support without requiring a diagnosis, documentation, or oversight. The rise of online platforms, social media, and a generation increasingly focused on wellness over illness helped propel coaching into the mainstream.

So What’s Coaching Then?

Coaching, unlike therapy, is not a licensed profession. That doesn’t mean it’s useless—but it does mean the quality and training can vary wildly. Coaching is intended for non-clinical support such as:

• Goal setting

• Developing healthy habits

• Improving work-life balance

• Navigating high-stress environments

• Education on communication and boundaries

• Relationship guidance (minus diagnosing or treating trauma)

Because coaching doesn’t involve diagnosing or treating mental illness, it’s not covered by insurance and is always private pay. It also allows licensed clinicians to offer services outside of states where they hold licensure, as long as they stay in a non-clinical coaching lane.

Why Some Therapists Offer Coaching in States They Aren’t Licensed In

Many therapists are licensed only in a few states but may have clients (or audiences especially if there is a social media presence) across the country. Since therapy can only be legally practiced where a clinician is licensed, some offer coaching in other states where they are not licensed. This expands access while remaining compliant with legal and ethical standards—as long as they’re not providing clinical services.

Pros for Clinicians:

• Expand their reach and income

• Provide non-clinical support legally across state lines

• Support former or relocating clients without engaging in therapy

Cons for Clinicians:

• Must be very careful not to blur lines between coaching and therapy

• Cannot use clinical tools (e.g., trauma processing, diagnoses, formal treatment protocals like CBT, DBT, EMDR etc.)

• Often requires separate branding, disclaimers, and documentation

Pros for Clients:

• Access to professionals they trust even if they move or live elsewhere

• Can receive guidance without being diagnosed

• Greater flexibility in session goals and frequency

Cons for Clients:

• No insurance coverage

• Cannot address clinical mental health issues

• Less regulation = more buyer beware (some red flags to watch out for requests for signing a non-disclosure agreement, claims that they can “cure” things that are not considered curable by scientific data thinking for example schizophrenia etc.)

What to Look for in a Coach:

If you’re working with someone who is not a licensed clinician in some state, it helps to know what training they do have. Look for:

• ICF Certification (International Coaching Federation)

• Board Certified Coach (BCC)

• Positive Psychology Coaching Certificates

• Trauma-informed coaching programs

Bonus points if they have lived experience or a related academic background. Red flag? If they start using words like “trauma healing,” “mental health recovery,” or diagnosing anything. That’s therapy. That’s licensed territory.

Why Some Therapists Offer Coaching (and Don’t Take Insurance):

Let’s address the elephant in the therapy room: insurance is a headache. While many clinicians accept insurance to increase access, here are some pros and cons:

Clinician Perspective

• Pros: Broader client access, steady referrals, more affordable for clients

• Cons: Lower pay, delayed payments, limits on session types and duration, administrative burnout

Client Perspective

• Pros: Lower cost, pre-authorization can simplify access

• Cons: Limited provider choice, difficulty finding in-network therapists, session caps, some services not covered (e.g., couples work, EMDR, ART)

And sometimes it’s worse. For example, insurance companies may refuse to panel if they believe the area is “over-staturated”. They would choose not to cover services that should otherwise be covered resulting in appeals needing to be filed by both the clinician and client. Insurance company, refusal to pay results in unexpected costs for client as they are still responsible to pay for the services rendered.

The Case for Private Pay Therapy

Private pay therapy might sound like (and may be) a luxury, but it comes with unique benefits for both client and provider:

Pros:

• No diagnosis required: Insurance requires a mental health diagnosis to approve treatment. Private pay lets you seek help without being labeled.

• Greater privacy: No third-party billing means your sessions stay between you and your therapist.

• Freedom and flexibility: You and your provider set the treatment goals, pace, and duration. Also, you can work with any provider you desire without be limited to being in-network with your insurance.

• Ideal for public-facing individuals: For professionals, public figures, or those in sensitive fields, private pay offers discretion without fear of career consequences.

Cons:

• Higher out-of-pocket cost: Without insurance coverage, you cover the full fee.

• Not accessible for everyone: Many people rely on insurance to afford consistent care.

Some therapists offer sliding scale fees or superbills (receipts you can submit to your insurance for potential reimbursement), but it varies widely.

Trending Coaches Right Now

Some popular coaching niches include:

• Life Coaches: General goal-setting and personal development

• Health Coaches: Wellness, diet, lifestyle changes

• Career Coaches: Job satisfaction, career transitions, burnout prevention

• Relationship Coaches: Improving communication and patterns (without processing trauma)

• Parenting Coaches: Support through developmental transitions, gentle discipline

Now what. . .

If you’re considering support but aren’t sure whether you need a therapist or a coach, here’s a shortcut:

• Are you dealing with trauma, anxiety, depression, or relationship wounds? Get a licensed therapist.

• Do you want to create structure, pursue a goal, or just need an accountability buddy? A good coach may fit the bill.

And if someone’s offering you both? Just make sure they’re clear about what hat they’re wearing.

It’s your mental health—you deserve to understand who’s helping you tend to it. Remember it is always okay to ask for credentials, education, experience, etc. Any person you are considering should be willing and able to provide those details for you upon request.