This is a first for me so what steps should I be taking to ensure that if my subordinate is fired there are no repercussions?
If you think your subordinate is using his health condition as a bogus excuse, this is a classic case where you build a paper trail to being the process.
This process should include a well documented performance improvement plan ( PIP ) that includes measurable objectives for the employee to hit. Don't be shocked if the employee actually steps up once on a PIP, and if they don't this should afford you ( legally ) some reasonable protection.
That being said, this does not protect the company from a lawsuit. An effective paper trail ( evidence ) is what protects you from a bogus lawsuit.