you, ive thought about this since reading your post yesterday
I think you're faced with one of the hardest choices anyone can ever make.
I perosnally think that when you are faced with this situation, any advice has to be given extremely carefully. So please, do what's right for you in this situation, balancing fall-out and your need to protect the girls.
Given your husband is supportive and friends too, if you have the strength I think you are in a position to bring this out openly.
If your stepsister is the approachable sort and would (perhaps eventually) believe you, I would talk to her and warn her. Obviously an incredibly difficult conversation. Plan out what you want to say first and talk it over with your husband. Consider where you would talk to her too, her house or yours?
Then I would consider going to the police. At least consider it.
If your stepsister is not the approachable sort then you may need to go direct to the police. Others here may be able to say if gonig to social services would also be an idea.
The shit will hit the fan either way, and you'll need to take a deep breath. But you would also be doing the right thing. If it came out later that he did abuse them and you knew the possibility was there, there would also be some heavy fallout, not least with your conscience. Having said that, if you are not in a strong enough position to survive the fallout then you do have to look after yourself and your own family first.
You might also want to find a good therapist just to get you over this period, if you do speak about it.
~again, I give this advice with some trepidation because this is such a difficult situation. Do talk it over with someone sensible you trust irl~