The Blue Banded Hermit according to the book I have, says it is an excellent addition to the reef aquarium. Doesn't say what kind of algae it eats but it says it does well at keeping excessive growths of algae under control. It says it should be kept in small groups and plenty of shells for molting and choosing a new house. It also says that the average lifespan in an aquarium is 2 years. Sorry I couldn't give you a specific on the coralline, but it is not usually the meal for hermits.
Do you have an Urchin in the tank? They will eat it as it is their main diet.