Heat oven to 350°F / 177°C. Grease a 9x13 inch (23 x 33 cm) baking dish.
Heat a 12-inch (30 cm) skillet over medium heat. Add the sausage and cook, breaking it into crumbles, for 7 to 8 minutes until no pink remains and it reaches 160°F/71°C.
Add the onion and bell pepper to the skillet and cook 3 to 4 minutes until softened. Drain off the excess grease and let the mixture cool slightly.
In a large bowl, whisk the eggs, milk, garlic powder, salt, and black pepper until no streaks of yolk remain.
Stir the cottage cheese and half the cheddar into the egg mixture. Small curds are fine, they melt into the eggs as it bakes.
Spread the sausage mixture evenly in the prepared baking dish. Pour the egg mixture over the top and sprinkle with the remaining cheddar and the paprika.
Bake for 35 to 40 minutes, until the center is set with no jiggle and an instant-read thermometer inserted in the middle reads 165°F/74°C.
Rest the casserole for 10 minutes before slicing, it firms up as it cools and holds together better.
Scatter chives over the top, cut into 8 pieces, and serve warm.