Requires same limitation on public employee contributions to flexible spending accounts as provided by federal law adjusted for inflation.

This bill requires New Jersey public employees (state, local government, and school district workers) to have their flexible spending account (FSA) contribution limits adjusted annually based on federal inflation adjustments. It aligns state rules with Section 125(i) of the federal tax code, which currently sets a $3,200 annual limit for 2024 (up from $2,500 in 2013). The change ensures public employees’ FSA contribution caps rise with inflation each year, preventing them from falling behind federal standards. This applies to all state and local government employers offering FSAs for medical/dental expenses not covered by health insurance.