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Trim excess fat from brisket; place fat in dutch oven. Render fat to measure 2 Tablespoons; remove trimmings. Sear brisket in hot fat until brown on all sides. Place brisket on rack in dutch oven. Season with 1/2 teaspoon salt and pepper. Add 1 cup water, onions, and bay leaf; cover. Simmer for 2 hours and 30 minutes. Arrange carrots and potatoes around brisket. Cover; simmer for 45 minutes longer or until brisket is tender. Remove brisket and vegetables to heated platter. Pour drippings into 2 cup measuring cup; add enough water to measure 1 1/2 cups. Place flour and remaining 1 teaspoon salt in dutch oven. Stir in drippings gradually until smooth. Stir in milk and horseradish. Place over low heat; cook, stirring constantly, until gravy is smooth and thick. Garnish brisket with chopped green onions. Serve with gravy.
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