If you took him out and don't have a hospital tank, where did he go? Please tell me you didn't flush him! If he had velvet (not sure, but best guess based on info) it is treatable.
Yes others can get it.
Marine velvet is caused by Amyloodinium ocellatum...a dinoflagellate algae. Also been called Oodinium. It is a parasite that infests the gills and body surfaces of fish hosts, appearing as a velvety sprinkling. Fish with this typically dash around the tank, scratch themselves (often causing scales to come up...or "molt") and breathe rapidly.
There are a number of good medications out there to treat this but it should be done in a hospital tank as the meds will also kill off good things in your live rock and sand and can also harm inverts.