N.J. Stat. § 40A:4-45.3e
In addition to the exceptions to the limits on increases to municipal appropriations set forth in section 3 of P.L. 1976, c.68 (C.40A:4-45.3) and to the county tax levy set forth in section 4 of P.L. 1976, c.68 (C.40A:4-45.4), an increase in appropriations that represents expenditures made by a municipality or county for the purpose of funding the provision of health insurance shall be exempt from the limits on increases to municipal appropriations and to the limits on increases to the county tax levy in county budgets, respectively, for any budget year, to the extent that the increases in health care costs equal that portion of the actual increase in total health care costs for the budget year that is in excess of four percent of the total health care costs in the prior year, but is not in excess of the product of the total health care costs in the prior year and the average percentage increase of the State Health Benefits Program, as annually determined by the Division of Pensions and Benefits in the Department of the Treasury.
N.J.S. § 40A:4-45.3e