President Reagan is expected to sign legislation this week that would free up health insurance premium refunds, ranging from $29 to $400, for more than 2 million federal workers and retirees.

If you're thinking it's been a long wait, you're right.

More than 2 million present and former government workers are due the refunds that resulted, the insurance companies say, from two factors in 1985: Workers and retirees used medical services -- and therefore health insurance -- less, and at the same time paid a larger percentage of their medical bills.

About 250,000 federal and postal workers and retirees in the Washington area are elgible for the refunds, which seven major health plans are offering only to employes and retirees who were enrolled in one of the plans in 1985.

Reagan okayed the refunds early last year, and Congress passed the legislation authorizing them on Dec. 12. But the bill, which would also lower 1986 health premiums for many workers and retirees, wasn't sent to the White House until last Wednesday.

The president has until midnight Jan. 20 to act on the bill. The Office of Personnel Management has recommended that he sign it.

If the president approves the bill, insurance companies are to contact all 1985 policyholders (even if they have since switched to another insurance plan) to advise them of the amounts due and make sure the companies have correct addresses. The tax-free checks will vary, depending on the plan, on whether the coverage was high- or low-option and on whether the policyholder was a white-collar worker or a postal employe.

Plans offering the rebates to federal policyholders are: Blue Cross-Blue Shield, Aetna, the health plans of the National Association of Letter Carriers, Government Employees Benefit Association, Government Employees Hospital Association and the American Federation of Government Employees, as well as the Foreign Service health plan.

The refund bill, sponsored by Rep. Mary Rose Oakar (D-Ohio), could result in lower health premiums beginning in April for many workers and retirees. The bill raises the level of government contributions to health plans, now an average of about 61 percent of the premium. For some employes and retirees in low-cost, low-option plans, the bill could bring the government contribution up to 80 percent of the premium.