The general rule to follow is don't lie about anything that they can verify. Actually don't lie at all, just think of yourself as having permission to exaggerate. Really the whole game is about exaggerating without outright lying. But to go back to your question, licensure, education, and employment dates are concrete facts that can be verified with a background/reference check, so in your case, you might have to be honest on your resume, but you can probably give some vague reason for why your employment there ended like "the direction of the company changed and I became redundant", or just say "health reasons, but I'm good now and ready to get back in the workforce", they won't probe further if you say it was for health out of fear of a lawsuit.

Something I would be comfortable exaggerating is experience with specific skills/tools. For example the last time I used Java was almost a decade ago, and it was only for college projects, nothing professional, so as you can imagine I'm an idiot compared to an actual professional Java programmer, but I'll put it on anyways (if it's listed in the job posting). It will improve the chances they'll give you an interview, and they might not even ask about it all, and if they do, it might not be a huge deal that you only have nominal experience with it.