The measurement is from the top of the trailer coupling to the ground and the top of the receiver to the ground. The tow bar height is based on that measurement. Any questions - call them. They are always happy to answer questions.
We have a problem with height mismatch in that we replaced our axles and the trailer is now higher off the ground. The Hensley now points towards the ground when we pull up the WD bars.
Here is a
link to the manual if you need.