You're better off with a bone amulet, but you can make stone work.
Without a special material coating (or special material), the skin will not grow over the object. In fact, even if you cut a hole for it and placed it in, it would be ejected during the healing. This is a feature of the body, not a bug. It's a good thing to not integrate things that stick into your wounds.
You can cut open the skin, place it underneath, and close the skin back up with sutures. This may prevent the object from auto-explanting, but there is no guarantee.
You'll be better off cutting a hole in the skin and affixing the object to the sternum. Without proper treatment this might just lead to a wound that won't heal. This is because the skin won't affix to the object and will remain in a state of constant irritation (as with the dog collars others have mentioned). The key is to coat any smooth object with material that allows it to be osseointegrated and allows skin growth over the surface. We have such technology today (something I've mentioned in a previous answer): Intraosseous transcutaneous amputation prosthesis or ITAP. Translated to English that means, in-the-bone and through-the-skin limb replacement. The very cool thing about these prosthetics is that they attach directly in the bone and don't rest on a healed over stump.
The most famous patient, currently, for these special prosthetics is a cat named Oscar.
For the medieval ages this is a difficult feat to achieve. You could use a bubbly epoxy to seal the stone and leave the surface amenable to osseointegration and dermal integration. Alternatively, if you use bone, very sterile bone, you can likely achieve the same effect.
But by creating this bone amulet, leaving the base of it as porous bone and the front as polished bone (or inlaid stone), you can have the amulet surgically attached to the sternum. This means skin will grow around the edges of the amulet, but not over the face of it. It will also be grown into the bone of the man and will remain for his entire life.
You also need to protect against infection.
As an extra precaution, you may want to make the amulet from one of his bones (perhaps the xiphoid process). This will help prevent rejection and will facilitate healing by integrating living bone, rather than simply a growth substrate.