In a large saucepan, bring water to a boil; add onions. Return to a boil. Reduce heat; cover and simmer for 10-12 minutes or until tender. Drain well. Place onions in an ungreased 13-in. x 9-in. baking dish.
In a small saucepan, melt 1/4 cup butter. Whisk in the flour, Worcestershire sauce, salt, paprika and pepper until smooth. Gradually stir in milk. Bring to a boil; cook and stir for 2 minutes or until thickened. Remove from the heat; stir in cheese until melted. Pour over onions; toss to coat.
Top with bread cubes. Melt remaining butter; drizzle over the top. Bake, uncovered, at 350° for 30-35 minutes or until golden brown.