Place sliced potatoes in a large bowl, pour ham over potatoes. Season with 1 teaspoon salt and 1/2 teaspoon pepper and mix well.
Melt butter in a medium saucepan over medium/high heat. Add flour and whisk well until well blended into a paste. Add 1 cup of milk and 1 1/2 cups of cheese, when cheese starts to melt, add the rest of the milk slowly whisking the entire time to make your cheese sauce. Allow mixture to come to a boil, add remaining salt, pepper, 1 teaspoon parsley, and half of the fresh chives. Remove from heat.
Preheat oven to 350 degrees.
Spray a 13x9 casserole dish with cooking spray. Layer half of the potatoes and ham in the bottom of the dish. Pour half of the cheese sauce over the potatoes, ensuring that all of the potatoes are covered with the sauce. Repeat with the remaining potatoes and ham and the rest of the cheese sauce.
Cover the baking dish with aluminum foil. Bake on middle rack of the oven for 75-80 minutes.
When baking is done, test potatoes to make sure they are fork tender. Add more time if needed. When they are finished remove the aluminum foil and sprinkle remaining 1/2 cup of cheese on top of the potatoes. Sprinkle remaining parsley and chives on top and place dish back into the oven. Cook for 15 more minutes until the cheese has melted and is golden brown on top.
Serve and enjoy!