Workman compensation Settlement offer?

I have just recieved notice that the insurance company has offered $1000 to settle (my part) in a workman compensation claim. They will pay my attorney's fee separate and apart. They will not pay any medical expenses (amounting to about $3000) which so far medicare and other health insurance has paid in full. I did not seek any medical expenses claimed as workman's compensation,but my attorney did seek medical cost reimbursements which as I mentioned they will not pay in the settlement. My question is basically, if I accept the settlement will I then have to notify medicare and other hearth insurance that paid for medical expenses that I recieved a settlement and have to pay them and also is the $1000 settlement taxable as income for next year. I will mention the settlement is final if accepted and I can make no other claims. Since filing this claim I did return to work full duty for a week and then they laid me off and have not rehired me so I am seeking employment else where. I would sincerely appreciate any knowledge about this you may have and any advice. Thank you.