The transition-metal dichalcogenide VSe2 exhibits an increased charge density wave transition temperature and an emerging insulating phase when thinned to a single layer. Here, we investigate the interplay of electronic and lattice degrees of freedom that underpin these phases in single-layer VSe2 using ultrafast pump-probe photoemission spectroscopy. In the insulating state, we observe a light-induced closure of the energy gap, which we disentangle from the ensuing hot carrier dynamics by fitting a model spectral function to the time-dependent photoemission intensity. This procedure leads to an estimated time scale of 480 fs for the closure of the gap, which suggests that the phase transition in single-layer VSe2 is driven by electron-lattice interactions rather than by Mott-like electronic effects. The ultrafast optical switching of these interactions in SL VSe2 demonstrates the potential for controlling phase transitions in 2D materials with light.