Pencil urchin loosing spikes

[droidus]

I've noticed at least two of the "spikes" laying on my sand bed. I remember the person at the aquarium store telling me if they start loosing them, the environment/tank is not healthy. Is this true? If so, what parameters should I look into? Is there any other reason they lose them?
EDIT:
I am using Chemi-Pure Elite.

 

[Mr. Mojo Rising]

the 2 normal reasons for losing spikes is because of water quality issue, or hunger.

 

[droidus]

What is the best way to feed him?
I've attached an image of my tank. Does it have enough algae? I notice that when I put algae wafers in for him, my pistol shrimp or hermit crabs get to it first.
As for water parameters, which ones should I be looking at?