Yes, you are. Photoshop layers do not become InDesign layers.
You can turn them on or off but it still remains a single graphic.
I am a greetings card designer and have a similar problem, I need both my layers to be visible that I have placed from photoshop into indesign.
What can I do as I need to work on the layers in photoshop first but then send to printer showing the two layers, one for the background and one for emboss drawing. Any help appreciated.
You can place a layered Photoshop file in InDesign and select which layers to show during the place procedure, check the import options in the lower left of the dialog window, or just hold down the Shift key as you place.
But, you can also change the visible layers in an already place image, in Indesign go the Object Menu - Object Layer Options.
You can turn on or off the layers at any time, just make sure the image is selected first.
So are you saying there is no way to edit the individual photoshop layers in indesign once it's placed?
Depends on what you mean by "edit." If you want to affect pixels, you'll have to edit in Photoshop. Fortunately, that's not so hard using InDesign's Edit Original feature.
If your objective is to separate Photoshop layers to InDesign layers, (presumably so that you can move them or control their visibility independently of each other), that's not so hard either. Just place the Photoshop image and copy it. Make a new InDesign Layer, paste-in-place, repeat for each layer, then use Object Layer Options to hide/reveal Photoshop layers of each copy as desired.