Heat oven to 350°. Coat 13 x 9 x 2-inch baking dish with nonstick cooking spray. Cook pasta in lightly salted water following package directions, about 12 minutes. Drain.
While pasta is cooking, melt butter in a medium-size, heavy-bottomed saucepan (not nonstick) over medium heat. Stir in flour until well blended; cook 1 minute. Whisk in 1 cup of milk and cook, whisking continuously, until smooth. Whisk in remaining 1 cup milk and continue to cook, whisking until thickened and smooth, about 5 minutes. Remove from heat; stir in salt, pepper and nutmeg. Whisk in 2 cups of the cheese until smooth.
In a large bowl, mix together the pasta, cheese sauce and 1 cup of the remaining cheese. Stir in the peas and ham. Pour into prepared baking dish. Scatter remaining 1 cup cheese evenly over the top.
Bake at 350° for 30 minutes or until bubbly. Remove from oven; allow to cool 10 minutes. May be served warm or at room temperature.
