1. You do not report anything on your 1040 regarding a health FSA, nor on your NJ return.
2. The number in box 16 should be "state wages", or your box 1 amount (federal wages) with certain non-deductible things in NJ added back in. So it is normal for the Box 16 amount for NJ taxpayers to be larger than the box 1 amount.
I could not open your attachment, but I think you are at a TurboTax screen which is asking you for adjustments to your NJ income.
These would be things that Mary described above, largely Section 125 cafeteria plans.
HOIWEVER, in this context, contributions to your 401(k) plan do not count. That is, alone of most retirement plan contributions, NJ does not tax contributions to 401(k) plans, so you do NOT have to add this back to NJ income. I think this is a relatively recent change; you can read about it here.
Since the HR/payroll people are the ones in charge of populating the numbers on the W-2, asking them about box 16 would be reasonable. At the same time, they might suggest some things to adjust, but it is not clear that you have anything to adjust. Talking to them is always a good idea.
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