Preheat a large skillet over medium heat. Add the breakfast sausage and cook, breaking it up with a spoon, until fully browned and cooked through, about 6-8 minutes. Drain excess grease and set aside.
In the same skillet, add diced green bell pepper, red bell pepper, and onion. Sauté for 5 minutes until vegetables are softened. Remove from heat and let cool slightly.
In a large mixing bowl, whisk together the eggs, whole milk, salt, black pepper, garlic powder, and dried parsley until well combined.
Add the cooked sausage, sautéed vegetables, and 2 cups of shredded cheddar cheese to the egg mixture. Stir gently to combine.
Lightly grease a 9×13-inch baking dish. Pour the egg mixture into the dish and spread evenly. Sprinkle the remaining 1 cup of shredded cheddar cheese evenly over the top.
Cover the baking dish tightly with aluminum foil. At this point, you can either bake immediately or freeze for later use.
To freeze: Place the covered casserole in the freezer for up to 3 months.
To bake immediately: Preheat oven to 350°F (175°C). Bake covered for 35 minutes, then remove foil and bake an additional 10 minutes until the casserole is set and the cheese is golden.
To bake from frozen: Remove the casserole from the freezer and let it thaw in the refrigerator overnight. Bake covered at 350°F (175°C) for 35 minutes, then uncover and bake for an additional 10 minutes until fully cooked and golden on top.
Let the casserole rest for 5 minutes before slicing and serving.