Place 3 1/2 cups of the milk chocolate chips in a large microwave safe bowl. Melt in 30 second increments, stirring between each increment, until the chocolate is melted.
Add the Cool Whip and peppermint extract to the bowl and beat the ingredients together with a hand mixer until smooth.
Line an 8x8 inch baking pan with plastic wrap and spread the mixture in an even layer across the pan.
Cover the pan with another layer of plastic wrap and place in the freezer to chill for at least 30 minutes.
Pull the mixture from the pan using the plastic wrap and flip it over onto a cutting board. Cut the bars into one-inch squares using a sharp knife.
Transfer the pieces to a tray or baking sheet lined with parchment paper and chill in the freezer for at least 30 minutes.
When ready to start decorating, melt the remaining chocolate in the microwave in 30 second intervals, stirring between each interval, until it's fully melted.
Working in batches, place a piece of candy on a fork and spoon the melted chocolate over the top until it's fully coated. Lightly tap the fork on the edge of the bowl to remove excess chocolate, then transfer the coated candy to a piece of parchment paper. Immediately top with crushed peppermint.
Transfer the chocolate covered candy to the refrigerator and allow the chocolate to cool and set completely before serving.