what will happen when battery health is below 80%

Your phone may go into performance management mode:

iPhone Battery and Performance - Apple Support

However, your phone will not stop working.

In general, at that point you should consider a battery replacement, but you do not need to have one done.

iPhone Battery Repair & Replacement - Apple Support

80% is not a magic number, but if you have any symptoms of a failing battery, such as unexpected shutdowns when the battery has otherwise sufficient charge, you should replace the battery. Apple can replace the battery in any Apple store or Apple authorized service provider, usually while you wait→iPhone Battery Replacement - Official Apple Support